This section should clearly describe the company’s policy on agency. The following are examples of different forms of agency the company may implement:
- The Company represents the seller/landlord exclusively when acting as the listing agent but not the selling agent.
- The Company represents the buyer/tenant exclusively when acting as the selling/leasing agent and not the listing agent.
- The Company represents both the seller/landlord and buyer/tenant as a dual agent (Limited Representation Disclosure Form required) when there are only one Sales Associate or two Sales Associates from the same company. Agency is established with the Broker, not the Sales Associate.
- The Company will cooperate and co-broke with a selling/leasing agent from any other brokerage that represents the seller/landlord exclusively or represents the buyer/tenant exclusively.
- You may want to check and ask the broker if you will be able to receive a commission if the listing your buyer is putting an offer on is not in the same MLS system you use, you may not receive a commission. Talk to your broker about that.
- The Company DOES or DOES NOT allow “sub-agency.”
Under A.R.S. § 32-2153(A)(2), the ADRE may sanction a licensee if the licensee has “[a]cted for more than one party in a transaction without the knowledge or consent of all parties to the transaction.”
A Sales Associate or Broker may not accept compensation from or represent more than one party without prior written consent from all parties (A.A.C. R4-28-1101(F)).
Some brokers elect to not allow the practice of dual agency and if so, they will need to provide a policy concerning the in-house transactions and how they will be handled. In other cases, some brokers internally allow dual agency but not “single agent” dual agency. Assignment and referral policies in these events should be clarified.
The broker may also wish to elaborate on other situations where the company may have prohibitions, such as:
1. Under no circumstances may a Sales Associate arrange or agree to limited dual agency representation if the sales associate has a current or future actual, indirect or potential interest in the transaction.
2. A Sales Associate may not represent both buyer/seller and lessee/lessor in a transaction, but shall ask the Managing Broker or Designated Broker to appoint another agent of the Company to represent one side of the transaction.
3. A Sales Associate may not list his/her property for sale.
4. In disclosing agency representation to the consumer, an agency disclosure form such as the AAR’s Real Estate Agency Disclosure & Election form (READE) must be acknowledged in writing, before providing substantive services to a client.
5. “Informed Consent” must be obtained before entering into an agency relationship. This Informed Consent must be in writing and signed by the client and the sales associate and setting forth the relationship options to the principal.
Questions concerning agency and non-agency relationships and appropriate disclosure should be directed to the Managing Broker or the Designated Broker if the Managing Broker is unavailable.