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What is Agency?<br />
A relationship established between a principal<br />
and an agent. Agent is the person who is<br />
authorized to represent and act on the behalf<br />
of another person.<br />
In Texas, we have 3 forms of agency that is<br />
primarily used for real estate purposes; Buyer,<br />
Seller and Intermediary. These are typically<br />
established direct or indirect. Most parties<br />
believe signing a representation agreement is<br />
the only way to create the agency relationship.<br />
However, indirect agency can be created<br />
despite a written agreement if the agent<br />
works as if they represent the client.<br />
Every agent is empowered to provide fiduciary<br />
duties (Obedience, Loyalty, Disclosure,<br />
Confidentiality, Accounting and Reasonable<br />
Care). Buyer’s agency is when an<br />
agent represents the buyer in a transaction.<br />
That said, agent represents the buyer and<br />
their interest only in a transaction.<br />
Seller’s agent has the same requirement<br />
but is only responsible for seller’s interest.<br />
The seller’s agent can sell to an unrepresented<br />
buyer directly but can only disclose facts<br />
and not opinions to this buyer, who becomes<br />
a customer. The customer participates fully<br />
knowing that they are not being represented<br />
and thus, the seller’s agent has no obligations<br />
to provide professional opinions to the customer.<br />
The third agency relationship is Intermediary<br />
agency. The intermediary is a relationship<br />
that allows an agent to represent both<br />
parties but cannot provide fiduciary duties to<br />
either parties. The parties must both sign to<br />
acknowledge this agency. In the absence of<br />
this agreement, the agent is typically an agent<br />
for one party and the other party becomes a<br />
customer.<br />
Often, I find customers that do not want<br />
to establish this relationship and asks many<br />
agents to find them a customer, especially<br />
in commercial activity. While this is permitted<br />
through non-exclusive agency, it<br />
is not recommended. First, who does that<br />
agent represent? Who will that agent provide<br />
the fiduciary care? It is best for sellers<br />
to find a reputable agent to represent them<br />
first, before an intermediary relationship can<br />
be considered. It is also better for marketing<br />
if potential buyers, represented or not,<br />
understand that there is only one agent to<br />
represent the seller. There can be confusion<br />
with information conveyed and often, prices<br />
can be different for the same property. This<br />
also applies to many businesses, whether it<br />
includes real property or just the goodwill<br />
and FF&E. My strong recommendation is<br />
to find an agent that best represents you by<br />
creating an agency relationship.<br />
에이전시는 본인과 대행인<br />
사이에 수립된 관계를 뜻한다.<br />
대행인(Agent)은<br />
어떤 사람을 대신하여<br />
그를 위한 행동을 할 수 있는<br />
권한을 부여받은 자이다.<br />
문의_ 존리 972-689-8949<br />
Monthly Real Estate Partner 31
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