Term
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Definition
| Where one party (an agent) represents another party (the principal) in dealings with a 3rd party. |
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Term
| A-B-C's of an Agency Relationship |
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Definition
Agreement that the agent is acting on behalf of the principal
(not required to be (expressed) in writing)
The principal has to receive a Benefit from the agent
The principal has Contol over the agent. The principal sets boundaries and can end an agency relationship. |
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Term
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Definition
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Term
| Fiduciary Relationship Duties |
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Definition
GOOD FAITH*: deliberate intention NOT to defraud the other party.
OBEDIENCE: agent must carry out the wishes of the principal.
LOYALTY: the agent must place the principal's interest above all others.
DISCLOSURE*: duty of the agent to disclose all relevant information to the principal
CONFIDENTIALITY: agent should not discuss with anyone besides the principal any facts that need not be disclosed and that may negatively affect the RE transaction for the principal
ACCOUNTING: document all monies paid, keep all relevant documents for a legally specified time.
REASONABLE CARE: agent must exercise reasonable care to the best of his ability
HONESTY: agent must be truthful to the principal
INTEGRITY: agent must act morally and ethically regarding the transaction
*The agent also has these (2) duties to a customer |
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Term
| Seller's Agent (Listing Agent) |
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Definition
A BROKER who obtains the listing from the SELLER.
Other agents who participate in the sale (through the MLS) are also the seller's agents (unless they agree to serve as the buyer's agent.)
While these agent owe a fiduciary duty to the seller, they also have a duty to the buyer to disclose all material facts about the property they have actual knowledge of. |
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Term
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Definition
| a BROKER who acts as an agent for the BUYER not obtained throught the MLS (not a cooperating broker) |
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Term
Selling Agent
(cooperating/participating agent) |
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Definition
| A selling agent is a BROKER who represents a BUYER which was was obtained through the MLS |
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Term
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Definition
an agent whose principal is an agent for another party.
A salesperson is an agent to the broker who is an agent to the seller, the salesperson is then a subagent to the seller |
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Term
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Definition
serves the principal in any capacity.
ex. an agent with a general power-of-attorney |
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Term
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Definition
this agent represents the principal in a particular business. This agency relationship is continuous.
ex. employee/employer
prop. manager/owner
RE agent/brokerage firm |
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Term
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Definition
this agent represents the principal in a particular activity or transaction; this relationship is not continuous.
ex. client representation regarding the buying and selling of real prop |
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Term
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Definition
| when ONE agent represents either the buyer or the seller. |
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Term
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Definition
When a brokerage firm represents TWO or more parties in the same transaction.
A dual agency applies if any licensee from that brokerage firm represents both sides of the transaction.
There is a fiduciary responsibility to both parties. It is a challenging and risky situation.
Hawaii law allows a dual agency, but only if both the buyer AND the seller provide informed written consent as to the dual agency. |
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Term
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Definition
| This occurs when a broker designates a salesperson for the seller and another salesperson for the buyer in the same transaction for an in-house sale. |
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Term
| Agency relationship example |
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Definition
If a seller (client) is represented by a RE Co., then the seller is the principal and the principal broker is the agent.
As between the salesperson and the PB, the PB is the principal and the salesperson is the agent (also considered a general agent).
Therefore, the salesperson is an agent to the PB, who is an agent to the seller, and the salesperson is regarded as a subagent to the seller (also considered a special agent.) |
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Term
Disclosure of Agency Relationship (1.)
HAR 16-99-3 |
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Definition
At the time a listing brokerage firm lists a property, the listing firm must disclose:
a.) whether the seller authorizes the listing brokerage firm to designate a subagent
b.)whether the seller authorizes the listing brokerage firm to share commissions with the seller's subagents or buyer's agents
The above disclosures must be in writing, dated , and signed by the seller and the listing brokerage firm. |
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Term
| Disclosure of Agency Relationship (2.) |
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Definition
Prior to preparing any contract between the buyer and the seller, the following disclosure (regarding who the agent represents in the transac.) must be made at least once to the BUYER, in writing OR orally:
a. if the licensee acting as the listing firm is acting alone (no subagency brokerage firm), the licensee must disclose who the licensee represents in the transac.
b. if the licensee acting in cooperation with a listing firm (subagency brokerage firm) has found a buyer, the licensee must disclose who the licensee represents in the transac.
THIS DISCLOSURE WILL LATER BE CONFIRMED IN WRITING IN THE AGENCY DISCLOSURE SECTION OF THE SALES CONTRACT |
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Term
| Disclosure of agency relationship (3.) |
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Definition
Prior to presenting a sales contract to the seller, the following disclosure must be made at least once to the SELLER, in writing OR orally.
a. The licensee acting as the listing brokerage firm must disclose to the seller who the selling brokerage firm (buyer's brokerage firm) represents in the transaction.
b. If there is no listing brokerage firm, each licensee involved in the transaction must disclose to the seller whether the licensee represents the buyer or the seller in the transaction.
THIS DISCLOSURE WILL LATER BE CONFIRMED IN WRITING IN THE AGENCY DISCLOSURE SECTION OF THE SALES CONTRACT |
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Term
| Termination of the Agency Relationship |
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Definition
- Fulfillment of Contract
- Expiration of Contract
- By mutual agreement
- If the contract cannot be fulfilled due to:
- property destroyed or condemned
- PB or Agent dies or is incapacitated
- either property breaches contract
- if the principal declares bankruptcy
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