Creating an Agency Relationship In this chapter –How relationships are formed –Agency disclosure –How we work with buyers –Advantages of buyer representation –Buyer representation agreement issues 25

2-2 Express Agreements Written agreements –Listing agreement –Buyer representation agreement –Tenant representation agreement –Property management agreement –Right-to-lease agreement 25

2-3 Oral Agreements Verbal agreement to represent a buyer Accepting a listing broker’s offer of subagency Open listing 25

2-4 Implied Agreements Accidental Occurs when a licensee talked and/or acted like an agent and the consumer relied on the action Usually results in a conflict 25

2-5 NAR's Policy on Agency Disclosure Timely Meaningful Written 28

2-6 Timely Before any contract or agreement is signed Before substantive discussion 28

2-7 Meaningful Disclose all legal forms of relationships Consumer can make informed consent 29

2-8 Written Put it in writing! 30

2-9 How We Work With Buyers Who Is Your Client? Who Is Your Customer? If you:Your customer is:You provide: Represent the seller The buyerCustomer service to the buyer Client service to the seller Represent the buyerThe sellerCustomer service to the seller Client service to the buyer Act as a facilitator or transaction broker Both buyer and seller Services for both according to your state law 32

2-10 Advantages for the Buyer Assertive advocate More information about the property Can work with a FSBO Access to market experts Savvy negotiator 35

2-11 Advantages for the Seller No liability for deeds of buyer’s rep Reduced chance seller’s agent will divulge confidential information Motivated, qualified buyers Extended market reach for faster sale 35

2-12 Advantages for the Buyer’s Rep Can share information freely Greater buyer loyalty Better relationship with buyer-client 35

2-13 Advantages for a FSBO Buyer’s rep can handle the details No cost if buyer compensates agent, or Likely less than full commission to a listing broker (resolve compensation issues before property showing) 36

2-14 Buyer Representation Issues Exclusivity Purpose Duration Compensation Services 37

2-15 When Relationships Change Client and customer must both provide informed consent Both must agree how you will handle the confidential information Interpersonal dimension 38

2-16 Compensation Compensation does not determine an agency relationship All parties must understand who represents whom and how fees will be paid All representatives’ statements and actions must be consistent with their agency relationships 40

2-17 Building Blocks How would you explain the advantages of exclusive buyer agency? How would you explain the importance of defining purpose, duration, and scope of work? 42