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- If our company (listing side) does not recognize designated agency
within our office (due to young, inexperienced agents and we are a
small office) can we accept a coop offer from a designated agent?
Our Exclusive Right to Sell does not indicate seller's approval for
designated agency.
- Accepting an offer through another firm is controlled by the seller's
authorization for the listing firm to cooperate with other firms.
Where the law requires that the potential for designated agency be
addressed in the agency agreement, it refers to designated agency
within the firm. Since your firm does not practice designated agency,
your agency agreements with sellers would contain no potential for
a buyer to be represented by a designated agent within your firm.
- Once you are a designated agent, can you ever get "undesignated"?
If so, how?
- BRRETA does not address how to get "undesignated." However,
an agency agreement is a contract which could be amended. It would
be important that all parties thoroughly understand possible
ramifications any time the roles of licensees are changed.
- What are all the possible ways to become a designated agent? i.e.,
show an in-house listing or just by including your name in the blank
on a buyer or seller agency agreement?
- BRRETA sets forth two ways to become a designated agent:
- By naming the designated agent in the written agency agreement.
This can only be done by authorization of the broker or the broker's
authorized representative. A licensee cannot just fill his or
her name in the blank if not authorized by the broker. It is the
client's decision whether he or she wants to be represented by
the licensee as a designated agent.
- The second way for a designated agent to be appointed involves
the personal listings of the broker. BRRETA has a specific provision
for this purpose, and it applies only to this situation. For further
explanation, see "Personal Listings
of Broker."
- If an agent was not appointed a designated agent in the listing
agreement but is later appointed by the broker, what paper work is
needed to create a complete trail indicating the broker did appoint
the agent as a designated agent and the buyer or seller agreed to
it?
- Again, with the one exception of a broker's personal listings,
BRRETA provides for the appointment of a designated agent only in
the written agency agreement. However, an agency agreement is a contract
which could be amended. It is important that all parties thoroughly
understand possible ramifications any time the roles of licensees
are changed.
- From a practical standpoint, if you have a top producer with multiple
listings, how and when should another agent be designated to do that
agent's business? The top producer's assistant may be going with him
or her out of town. The top producer may use different agents to cover
for them. Doesn't the listing agent create the potential for transactional
brokerage if a buyer client wants to see the temporary designated
agent's listing?
- BRRETA II does not address the appointment of temporary designated
agents. However, more than one licensee may be appointed in the agency
agreement as the designated agent for the client. Let's say you have
the top producer, his or her licensed personal assistant, and another
affiliated licensee designated in the written agency agreement to
act as the buyer's designated agent. All three licensees represent
the buyer as the buyer's designated agent. If the buyer wants to see
a listing of any of the three licensees, none of them could continue
to represent the buyer. However, if the buyer and seller sign a Transaction
Broker Addendum, the status of the licensees would be changed from
designated agent to transaction broker. In this scenario, none of
the three licensees is a "temporary" designated agent.
- As an agent, are you responsible for making sure the other agent
fills in the Agency Disclosure correctly?
- Every licensee involved in a transaction must understand his or
her role in the transaction and communicate so that the person writing
the offer knows what to check for the listing side.
A licensee filling out an offer is responsible for correctly identifying
his or her brokerage relationship and for finding out the correct
brokerage relationship for the listing side if the property is listed.
The information should be obtained prior to showing the property;
then, if the buyer chooses to make an offer, the licensee will be
able to correctly disclose the brokerage relationships in the contract.
Keep in mind that disclosure of "brokerage" relationships is the correct
terminology. Transaction broker is not an agency relationship. There
may be no agency relationship to disclose. Thus the law now requires
disclosure of brokerage relationships between all licensees involved
and the seller and buyer.
- If you are working with a customer, do you have the choice of subagency
or transaction brokerage?
- On another firm's listings, when you are working with an unrepresented
buyer, you are acting as a transaction broker unless subagency is
offered and accepted. Subagency depends on your company's policy and
also on the listing firm's policy.
- May an agent with multiple licensed assistants (4 to 6) use an
addendum to the listing agreement with the buyer or seller to list
their individual assistants as designated agents?
- When several licensees will act as the designated agent, all their
names need to be included. An addendum to the agency ageement could
be used if there isn't room on the form to list all the names. If
this is a common occurrence in a firm, the broker may want to revise
that page of the agreement form to leave more room.
- If a buyer will not sign a Buyer Agency Contract, should the selling
agent check the Transaction Broker box?
- It depends. If it's a company listing with no designated agent
for the seller, the selling agent should check seller's agent. If
it's another company's listing and an offer of subagency is accepted,
the selling agent should check seller's agent. Otherwise, the selling
agent would check transaction broker. In either case, the buyer is
unrepresented.
- Why does the transaction broker addendum approved by KREC automatically
assume there is a buyers agency agreement? For that matter, why would
there have to be a listing agreement that establishes a fiduciary
between a seller and real estate company when the seller may not want
representation.
- The transaction broker addendum (TBA) forms assume there is a buyer's
agency agreement because a transaction broker addendum is not used
unless the firm has agency agreements with both parties. The only
purpose of a TBA is to amend agency agreements. If the agency agreements
were not amended and you proceeded with the transaction, you would
have an illegal dual agency. The TBA is the method of obtaining the
informed consent of the seller and the buyer to change the status
from seller's agent and buyer's agent to transaction broker.
- What are the options when you are the only broker in the office?
- If the broker is the only licensee, designated agency is not an
option. The broker may act as a seller's agent or a buyer's agent
(not in the same transaction); as a landlord's agent or a tenant's
agent (not in the same transaction); or as a transaction broker.
- When engaged in a coop sale, how do I, as a Broker, explain to
our client that I'm a Transaction Broker and not representing them?
- In this scenario, there is a designated agent for the buyer, which
automatically makes the broker a transaction broker.
When a buyer-client signs an agency agreement appointing a designated
agent, this is the time to go over everyone's role: The buyer is selecting
representation by one agent. Does the buyer understand what that means?
Does the buyer understand that no other licensees in the firm represent
him or her? And does the buyer understand that the supervising broker
takes a neutral position as a transaction broker? Explain to the buyer:
whether the property is a company listing, another firm's listing
or a FSBO, the designated agent represents the buyer and the broker's
acts as transaction broker. Their roles do not change because another
firm's listing is being shown.
- If your name is in the designated agency blank in any of the agreements,
do you have to show an in-house listing to trigger designated agency?
- No. If you are appointed as a designated agent, you are a designated
agent on any property you show your buyer-client. Your status would
have to be changed if your buyer-client was interested in a property
where you were also the designated agent for the seller. If agreed
to by the buyer and seller by signing a transaction broker addendum,
you would act as a transaction broker.
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