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Can a brokerage firm practice designated agency if the supervising broker lists and sells property?

BRRETA makes provision for a brokerage firm to practice designated agency even when the supervising broker actively lists and sells. It can be done even though:

  • a supervising broker cannot act as a designated agent; and
  • in any transaction involving a designated agent, the supervising broker of the designated agent must act as a transaction broker.

Two important provisions of BRRETA must be understood.

  • K.S.A. 58-30,109(b)(2). If a buyer client of a designated agent wants to see a property which was personally listed by the broker, the broker, with the written consent of the seller, may specifically designate an affiliated licensee who will act as legal agent of the seller client to the exclusion of all other affiliated licensees. The written consent of the seller shall contain the name of the prospective buyer and shall acknowledge that the broker shall act as a transaction broker regarding any transaction with the buyer. The written consent of the seller shall be signed prior to presentation of any offer.
  • K.S.A. 58-30,103(g)(3). An agency agreement with a seller shall include any potential for the broker to designate an affiliated licensee to act as the designated agent for the seller on the broker's personal listing pursuant to subsection (b)(2) of K.S.A. 58-30,109.

An Example

Sally Super is the supervising broker for ABC Realty. Sally has affiliated licensees who act as designated agents. Sally also lists and sells property.

The first step in the process is for Sally to thoroughly explain her company policy to the seller when she lists a property. Sally explains that she and all licensees in her firm will act as the seller's agent, but that a situation may arise which would alter their relationship. Licensees in Sally's firm also act as designated agents for buyers. If one of their buyer clients is interested in the seller's property, Sally could not act as the seller's agent in a transaction with that buyer. Sally carefully goes over designated agency and her role as a transaction broker. She then explains that if the situation arises, she could at that time, with the seller's written consent, appoint another licensee in the firm to act as the seller's designated agent. In that event, both the buyer and seller would be represented by a different designated agent and Sally would act as a transaction broker.

If the seller agrees, the second step is for Sally to make sure that this POTENTIAL is set forth in the agency agreement with the seller.

The third step takes place only if the situation arises. If a buyer client of a designated agent is interested in the property, the seller's written consent must be obtained at the appropriate time.

In this example, Bob Brown and Sue Jones are affiliated licensees with ABC Realty. Bob is the designated buyer's agent for Bill White. Bob shows Bill the seller's property, and Bill wants to make an offer. Sally decides to designate Sue Jones as the designated agent for the seller. Before Bill's offer can be presented, the seller's written consent must be obtained. Sally prepares the written consent for Sue Jones to act as designated agent for the seller. It contains the name of the prospective buyer, Bill White, and acknowledges that Sally Super will act as a transaction broker regarding any transaction with Bill White. If the seller signs the written consent, Sue represents the seller, Bob represents the buyer, and Sally acts as a transaction broker in the contemplated transaction between the seller and Bill White.

NOTE:

This is the only situation where BRRETA authorizes appointment of a designated agent in other than a written agency agreement.


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