Agency Disclosure

Going back to Real Estate Purchase Contract. Today I will cover Agency.

Agency Disclosure is mandatory, and this item often gets agents in trouble.

1. Agent should not write any offers prior to written agreement with his/her client. It avoids any confusion who Agent can or cannot represent and how much he/she will be paid. As a seller, you can choose if you are fine with Agent potentially representing both you-Seller and Buyer (limited representation/limited agency). Even though some may consider this limited representation is a conflict of interests, it is legal in Utah.

a. Here is why agents cannot list the property without an agreement, and cannot write an offer without one.

2. Limited Agency is prohibited if

a. If Agent is or one of the owner of the house Buyers are interested to buy (In other words, agents can sell their own houses as listing agents, but cannot represent both themselves and buyers)

b. Same applies if agent is officer, director, partner, member, employee or stockholder in the property buyer is interested in.

So let's make it clear:

Q and A:

A. Can Agents sell a property they have some or all ownership in? Yes
B. Can that same Agent also act as a Buyer's Agent? No
C. Can Agent represent buyer even though he/she represent seller/has a listing? Yes, only if seller and buyer authorized him/her to do so.
D. Can a listing agent purchase a property that they have listed or are trying to obtain listing? Most likely not.

Even though limited agency is legal in Utah. In some situations the law recognizes that it is not impossible, but difficult to fulfill fiduciary duties to both seller and buyers.

Agency is the possibly the most important aspect of what agents do. And, Agent has following duties to his/her client:

Loyaalty
Obedience
Full Disclosure
Confidentiality
Reasonable care and diligence
Holding Safe and accounting for all money or property entrusted to the Agent

The question which has never been aswered yet is does Agent have some type of ongoing agency relationship? In other words, let's say agent had a listing, but now he/she doesn't; however, now agent has a buyer for his/her previous listing... Potentially, even though it is not clearly asnwered by law situation, it is risky situation because as a Agent, you have knowledge of very private information such as previous offers, for instance...