Bay Area Real Estate Wiki

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====== Creation of Agency and Agency Agreements ======

===== Creation of Agency =====
Agency is created when a principal authorizes an agent to act on their behalf.

  * Express Agreement
    * Clearly stated, written or oral
    * Most real estate agencies are created in writing

  * Implied Agreement
    * Created by conduct of the parties
    * Actions imply consent and authority

  * Ostensible (Apparent) Agency
    * Created by principal’s words or actions to a third party
    * Third party reasonably believes agency exists

  * Agency by Ratification
    * Principal approves an agent’s unauthorized act after it occurs
    * Approval makes the act binding

  * Agency by Estoppel
    * Principal prevented from denying agency
    * Third party relied on principal’s representation

===== Agency Agreements =====
Agency agreements define the scope and terms of representation.

==== 1. Listing Agreements ====
Contracts between seller and broker.

  * Open Listing
    * Multiple brokers may represent seller
    * Only the procuring cause is paid
    * Seller may sell without paying commission

  * Exclusive Agency Listing
    * One broker authorized
    * Seller may sell without paying commission

  * Exclusive Right-to-Sell Listing
    * One broker authorized
    * Broker paid regardless of who sells
    * Most common listing in California

==== 2. Buyer Representation Agreements ====
Contracts between buyer and broker.

  * Defines scope of representation
  * May specify compensation
  * Creates fiduciary duties to buyer

==== 3. Dual Agency Agreement ====
Allows broker to represent both buyer and seller.

  * Requires informed written consent
  * Must disclose agency relationships
  * Fiduciary duties are limited

===== Termination of Agency =====
Agency ends by operation of law or agreement.

  * Completion of purpose
  * Expiration of agreement
  * Mutual agreement
  * Death or incapacity of principal or agent
  * Destruction of property
  * Bankruptcy of principal