Types of Agency
There are numerous types of agencies in the field of real estate. An agent is a person that represents the interest of another person. They are also specialist who gives professional advice. Agents charge either a percentage of the transaction price, which is a commission, or a fee for time and expenses. A real estate agent is licensed by the state they practice in. There is an agreement between the agent and the client. The agreement creates the agency, identifies the assignment with instructions for the agent, establishes the payment agreement, and announces this agency to the world. A proof of the agency is a written agreement between the two parties involved. A single agency is where an agent represents only one client in a transaction, for example buyer, seller, lessee, or lessor. A client, or principal, typically is the party who pays the agent to solve a problem. The responsibilities of the agent include accountability, confidentiality, disclosure, obedience, skill and care. Some types of agencies are the owner/seller agency, buyer agency, dual agency, tenants and leasing agency, and facilitator.
There are four different ways an agency can be established. An express agency is an agreement between the agent and the client, preferably in writing. The second type is an implied agency. A customer could view an agent as a representative of their interest by what the agent does, says, or acts. The agent should be sure to avoid this impression by disclosing any prior express agency with the client to a potential customer. The next type of agency is an oral agency. An oral express agency may be created between the agent and the client, but is not recommended. The state licensing authority and the statute of fraud may require that an agency agreement to be written to be enforceable in a court of law. The final type is ratification. In a special set of circumstances, a principal is asked to condone and approve, or ratify, the actions of an...
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