Are you an agent or a subagent?

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03/27/2015 | Author: Editorial Staff

A buyer asked me to show him a property that’s listed for sale in the MLS, but we didn’t sign a representation agreement. If I show him the property without a signed representation agreement, would I be considered a subagent of the seller?

It depends. If you have created an agency relationship in which you’re representing the buyer—even if you haven’t signed a representation agreement—then you have a fiduciary duty to the buyer and you are not a subagent of the seller. 

A subagency relationship is not as common as it used to be, but it usually arises when a buyer who is not represented uses the services of a broker to view a property. That broker then owes a fiduciary duty to the listing broker and the seller—not the buyer—and the buyer is treated as customer of the broker. It is important that a broker in this situation obtain permission from the listing broker, and explain his or her role to the buyer to avoid any confusion.    

Read more legal FAQs on texasrealestate.com

Categories: Legal
Tags: legal, legal faq, subagency, agency


Comments

Richard Weeks on 04/08/2015

When they are in that limbo stage where agency has not been established I prefer to just call them prospects.

Rick DeVoss on 04/08/2015

It would seem that we are getting way off track, and discussing too many “academic legal issues” and not the reality of selling real estate on the streets of Texas.

Mr.Weeks—- Yes, I used the word “customer”, because at the time you are required to have the discussion with them, (the IABS form), they ARE a customer!  They don’t become your client until after the two of you decide that you are going to form a relationship.  When they hire you to represent them, THEN they are your client.
And what was that about being a “subagent”...?  ~You don’t automatically become a subagent of the listing broker just because you didn’t sign a buyer’s rep agreement.  First, you have to have the permission of the Listing Broker to work as his/her subagent.  Second, the Broker has to offer you compensation for acting as a representative of the seller.  ...Unless, of course, you are one of those agents who like to work for free.

You can sell a house to a buyer without signing a “buyer’s rep agreement.”  You can even get paid for it.  It does not really matter whether you “represent” the buyer or not, unless he asks for that level of service.  Some Brokers would never let you be their ‘subagent’.  (In Dallas, Ebby Halliday is one of them.)  But they will compensate you for selling the house to a buyer, whether you represent him or not.

There are a lot of legal issues that could be debated, but that is not what our business should be about.  If a buyer thinks you are representing him, and you screw up, then he might sue you.  (or file a complaint)  What we all want are loyal buyers.  How do we achieve that?  We want to work hard for the client, find him the right house, and get paid at the closing.  It all goes along fine until the buyer wanders off and buys a house from another agent, and then you don’t get paid.  ~So what do you do about it?  Do you take the buyer to court and sue for the commission that you think you have earned?  Or, do you slough it off and go on to the next customer?  ~I don’t like the idea of not getting paid for my time & expertise.  So I believe we should all require the buyer to pay a retainer fee up front, and that way the agent gets paid for their time & gas.  Maybe you can give an incentive for the buyer to keep working with you.  Or maybe you just establish such a strong, healthy relationship with the buyer that they fall in love with you and never even think of straying to another agent!

I like a former agent’s analogy to “going steady.”
It is a relationship based on trust.
You can have a pre-nup agreement if you wish, but usually you don’t in the real world.  There can be legal issues when you break up, and that is why having an agreement in writing is such a good idea.

Richard Weeks on 04/08/2015

Now I’m confused Mr DeVoss just said “it is easier to explain the concept to my customers”, that implies h e works with customers and not clients so he must be a sub agent?

Mike McEwen on 04/08/2015

Even if the IABS is not signed that does not mean that an agency relationship is not necessarily established.  Your conduct can create constructive agency.

Rick DeVoss on 04/08/2015

Whoa, Mike!  —-There necessarily DOES have to be a discussion about “representation”; that is exactly what TREC requires every agent to do with the use of the IABS information.

Agents and customers alike need to be fully aware of who is representing whom.  I’ve found over the years that it is easier to explain the concept to my customers than it is to get agents to understand it.  We definitely need more classes on this topic, and I will bet you that a very small minority of licensees are reading this blog.  ~So the word is not getting out!

Q: If a customer calls on a sign or ad, and the agent takes them out to look at 3 houses listed with different brokers, who does the agent represent when they decide to make an offer on the 3rd house??

Any good attorney will say “it depends.”
It depends on what you said.  It depends on what you did.  And it depends on what the other party thought the scenario was.  ~How much of that do you want to test in court without a written document, signed by both parties…?

If we’re not talking about getting a commission, what are we doing??
~It would seem that too many agents are willing to work for free.  We should all require a retainer fee up front, ...just like attorneys do!

 

Mark Sonnier on 04/08/2015

Buyers Rep doesn’t guarantee your commission. It only guarantees your commission if the buyer agrees to pay you. Other than that, the commission payment is only agreed to in the Listing agreement. The agreement also guarantees a buyer’s agent commission under the co-op agreement. The 2 brokers don’t have separate written agreements with each other for commissions. However, they are required to list commissions to buyers agents or sub agents in the MLS which in my opinion, constitutes in writing and therefore, constitutes a “contract” between brokers even though there is no broker to broker written agreement.

David Kline on 04/08/2015

I don’t think the enforceability of commission is what I am concerned with as some people seem to be noting.  If I represent a buyer and they went to another agency after I spent time with them I would brush it off rather than pursuing someone who doesn’t want to work with me.  Most buyers will stick with you if you give them good service.  The bigger issue is confusion of who you work for and generally buyers think you work for them, so that part has to be made clear.

Mike McEwen on 04/08/2015

Representation can be created by action and conduct.  There does not necessarily have to be any kind of discussion or written agreement.

Judy McKee on 04/08/2015

Yes the article is on representation!  Representation takes place when the consumer agrees to allow the representation. The only way the consumer can Agee is the licensee has to ask. To verify the consumer agreed and you want to get your commission it needs to be in writing. What is your broker,s policy on agency, sub agency and buyer agreements? This subject needs more education to all licensees in Texas.

Mike McEwen on 04/08/2015

While TRELA says you have to have an agreement in writing in order to earn a commission, that has nothing to do w/ whether or not an agency relationship has been created

Rick DeVoss on 04/08/2015

Judy, I think you are right about that.  Not only does the Statute say that R.E. transactions have to be in writing, but we as Realtors are held to a higher standard when it comes to dealing with the public.  If you wanted to take a case to court, you would have to prove everything with documentation.  —And what are we talking about if it is not a court case??

Can you really compare ‘mowing the lawn’ to a buyer’s rep situation? —Not in my opinion.  The guy who mowed the yard has proof only if he took before and after pictures of the grass, and a photo of him mowing it.  He would need a credible witness to back up the story that they had agreed to $30 for payment.  But how do you really compare that to a buyer’s rep situation?  Does any evidence exist that you showed the buyer houses?  Can you prove you fulfilled all the obligations of your ‘contract’ ?  Can you prove the buyer did not? 

Where are these examples of court cases of record?  Law is based on precedent.  What precedent has been set regarding disputes over buyer representation?
And when would money change hands in a contract between the agent and the buyer??  (The only way I can think of is IF the buyer paid a retainer fee to the agent up front, and THEN he defaulted on the agreement.)  But how many agents are collecting fees up front from a buyer?    (Maybe some do, but it is not a common practice around here.)

Perhaps we should all stick to what we’ve been told to do by the R.E. Commission.  I don’t remember anything in all the classes we’ve taken saying that it is OK to use a verbal agreement to do anything in real estate.

    ~The only thing worse than an attorney is a wanna be attorney.  And the Lord knows too many agents are guilty of practicing law.  Just remember:  if you want to have a contractual agreement between you and your buyer, then you’d better have a contract you can pull out of your pocket!

Judy McKee on 04/08/2015

This is why we have so much controversy in our profession. Difference of opinions and interpretation of law and REALTOR do’s and don’ts through our Code of Ethics, MLS Rules and Regulations and state law.
Those who disagree with me continue your business as you see fit, but if you want to be paid a commission it needs to be in writing to be enforceable should you do go to court. Otherwise you will not get paid.

Mark Sonnier on 04/08/2015

Judy- just to clarify as I went another way. You are correct that a real estate contract must be in writing to be enforceable under the Statute of Frauds.  You can make a verbal contract in real estate, but if any party backs out before the money is exchanged, the contract most likely would not be enforceable in a court.

Mark Sonnier on 04/08/2015

Judy McKee- No, I have not been to court in regards to a verbal contract. However, I dissect similar cases in my law school classes. For example, you tell a landscaper that you will him $30 to mow your lawn. He agrees. Nothing in writing, but you have just created a contract! He mows the lawn and you refuse to pay him the $30 you agreed to pay him for mowing your lawn, he can take you to court for breach of contract and will probably have a good chance of winning even without the contract being in writing. Courts have found real estate contracts enforceable in similar circumstances. I guess the jist of what I am saying is that Law of Contracts and Agency is much more complex. Just because something is not in writing doesn’t mean that it does not exist, it just may be harder to prove and a judge and/or jury may have to decide.

Richard Weeks on 04/08/2015

Judy McKee you might wish to check your facts.  Contract dealing with the exchange of real estate must be in writing.  Other types of transactions may be done verbally.

Mike McEwen on 04/08/2015

It is not true in Texas that all contracts have to be in writing.  In the case of real estate law, under the Statute of Frauds, virtually all contract do have to be in writing.  There are even exceptions there, however

Judy McKee on 04/08/2015

Mark Sonnier interesting comment. Have you been to court on a verbal contract? Texas Contract Law says” To be enforceable a contract must be in writing”. Has the law changed. I missed that one.

Mark Sonnier on 04/08/2015

A contract can be verbal and will stand up in court. A written contract just makes it easier to track. A contract is just an agreement that contains a promise, consideration and a bargain. As long as it contains those elements, courts have upheld written, verbal, handshakes,etc as contracts. I believe that you could send an email stating that you are a buyers rep and as long as that person agrees, you are a BR.  The BR Agreement is a more formal and detailed documentation , but is not required to form an Agency/representation.

Rick DeVoss on 04/08/2015

Cissy—-  I would think the answer is “No”, ...unless you provide specific details to outline the contract terms between the two of you.  Then the buyer would need to “sign it”, and send back to you showing his agreement to the terms you presented.

Otherwise, all you have is a verbal understanding, and that will not hold water in court.  So the question is, What is your intent when having a “Buyer’s Representation Agreement”...?  Do you want a document that a judge could render a decision on?  ...Or, do you just want to explain to the buyer how you want him to behave throughout the transaction?

Does the buyer really care that you have outlined in writing what services you will provide him?  ~Probably not.  (He just wants to find a house he can buy.)  But do you care what the buyer does after you have spent countless hours showing him houses all over the county?  ~What will you do if he buys a house from another agent?  ~What would you do if he buys the same house you have already shown him, and it is with another agent?

For maximum satisfaction it is best to document everything.  Don’t plan on showing it all to a judge, but be prepared if you have to.

Cissy Renfroer on 04/07/2015

Does putting the representation in an email to the client and they then respond to that email,  count as an understanding.  Such as…........... Hi Joe Black,  Just wanting to confirm that as your buyers representative, I am going to do everything that I can to insure you and your family find the perfect home.  I am looking forward to our next…........blah blah blah smile

Rick DeVoss on 04/03/2015

Mr. Weeks—- The answers to all of your questions are “Yes”.

Richard Weeks on 04/03/2015

Mr. Rick DeVoss, I am curious if your 2 page buyers rep agreement has the option for the buyer to approve or not approve the possibility of intermediary, do you advise the buyer that you might be working with other buyers who may have an interest in the same property, and finally does the agreement have a start and end date not subject to prior notice?

Mike McEwen on 04/02/2015

I think it is always essential for a seller or buyer to have a fiduciary working for him.  What New Mexico is doing is even more chicken than Intermediary that we have in Texas.

Rick DeVoss on 04/02/2015

Once again, I am getting this email 6 days later than all of you who have already commented herein…

I agree with Bruce:  TREC is not listening.  TAR is not listening.  ~Our roles when working with buyers and sellers have been too vague for too long.  Since I have been licensed in Texas for 35 years, I have seen many changes.    But I am not sure what Judy meant about changes in the laws over the last 5 years that would affect client representation.

You can sell a house without representing anybody.  (Be careful how you do it.)  Since the liabilities of ‘sub-agency’ were published a few years ago, most Brokers don’t even want some other agent working as a sub-agent of their office.  Why would a Broker want the liability for an agent he had not trained and had no control over??  But just because you fail to get the buyer to sign a ‘Buyer’s Rep Agreement’ doesn’t make you a sub-agent of the seller’s Broker.

You (and your Broker) are free to create your own written agreement with a buyer.  I personally have one that is two pages, but I agree that we should have one that is only one page long for the skeptical buyer to sign.  We don’t need TAR’s or TREC’s attorney’s to design a bullet-proof legal form that is nine pages with addenda.  We need something simple that is easy to explain to a new agent.  ...Heck, the buyer would probably sign it if the agent knew how to present it!

Normally, I don’t show houses to buyers until we have a sit down consultation.  Part of that 2-hour discussion is the relationship between agents and buyers.  Once they understand the services that I can provide them as their representative, and what I WON’T provide them if I am NOT their representative, I have never had a customer refuse to become my client.  They usually sign quickly when they realize I won’t talk about houses until we get past that point.

I also have a license in New Mexico.  In that state, and many others, the agents/brokers don’t represent either party.  They are transactional brokers and facilitate the transaction, treating all parties fairly and honestly.  But it gets away from the possible lawsuits that we set ourselves up for in Texas.  Why don’t some members of the TREC go and visit the NMREC and see how they have structured their contracts and their relationships with customers?  ~It works very smoothly and has for many years.

Bobbi— I would suggest that every Agent should refuse to meet a buyer that you’ve never met before “at the property address.”  I firmly believe it is our duty to educate the buying public first, and sell them a house later.  There are many nuances that 99% of all buyers do not understand about a Real Estate transaction.  They need to have a consultation with us first.  That is what makes us ‘professionals’.  (One of the things…)  Don’t you always have a consultation with your doctor prior to surgery or getting a medication??  Don’t you always have a consultation with an attorney before going into court??  ~We all need to start acting as professionals, and setting some boundaries with our customers.  Maybe then they would respect us more.  (And it is for your own safety that you should not meet strangers at a vacant house.)

Steve—-  I like your analogy!  Maybe we should put the heading on the form and call it a “Going Steady Agreement”...ha!  ~Maybe we should also require a retainer up front, like attorney’s do.  (Why do we have all these attorney’s protecting us in our agencies at TAR and TREC and yet they don’t show us how to act as smart professionals, and get a retainer fee like they do?)  ~You can easily ask a buyer to pay a fee for your up front services, and then agree to rebate it at closing.  That way you get something for your time if they decide to not buy a house from you.  (What about this idea:  Pay me $500 up front, and I’ll rebate you $1000 at closing.  ~?)  ...(I would gladly give up $500 for every closing compared to all the times I have shown houses for months and then they don’t buy one.)

But back to the statement made at the top of this article:  It appears that it needs a LOT of clarification, and that many agents are confused about this topic!  I think you can show a house to a customer without having any “fiduciary duties” to anyone.  (Doesn’t that happen at an Open House where the host is not licensed?)  ~Since when do I have a fiduciary duty to a seller that I don’t represent??  ~And when have I ever had a fiduciary duty to some broker that I don’t work for?

Just like the unpaid taxi driver, I can unlock a house and turn on lights for people to look around without representing either party.  ~It’s what you say after that that defines your duties and relationship with the customer.  Does an attorney “represent” every person he talks to??  ~And neither do we!

===========================

Richard Weeks on 04/02/2015

Much like Bob Baker I love to see so many opinions.

This is a topic that most agents know or care about.  My 4 cents worth is first off the listing broker must approve sub agency and the way they to that is by stating in mls is they will pay or not pay a sub agent.  If they will not pay I would say the agent working with that prospect (I will not call them a customer or client) will find some way to establish that agency relationship.  In addition I think all borker’s should have it as part of their policy if they will accept sub agency.

Since TREC does not get involved in listing agreements why would they address buyer rep agreements?

Most agent don’t use buyer rep agreements because they don’t know how to present it.  Mr. Buyer you want to work with me sign the buyer rep agreement and get pre approved with a lender.  If you don’t you are probably wasting my time, and time if money get someone else to play taxi driver.

I big shout out to Mark Sonnier for putting Judy in her place.  She should not be telling people they need to take a class. 

Cynthia I. Lott, GRI, ABR, CHMS, green, BPOR on 04/02/2015

One other thing I want to mention.  A key component to getting the Buyer’s Rep Agreement signed is building trust and rapport at the Buyer’s Consultation.  Find a common topic to discuss first and then get the documentation signed.  Implied, in my opinion, does not offer the protection that a signed document does.  The agreement is not intimidating if you learn how to have confidence in presenting it to your buyer.

Mark Sonnier on 04/02/2015

Dave Kline- I agree with you 100%

THERESA AKIN on 04/02/2015

Be careful of implied anything. It is as bad as an assumption. It can bite you in the end very hard and you won’t be smiling on the way to closing and certainly not on your way to the bank.

David Kline on 04/02/2015

I think that an agent should by default represent the buyer unless they are the listing agent. Sub agency had its day a long time ago and that way of thinking started changing in the 1990s when representing buyers made more sense.  It seems logical that most buyers think you are working for them when you show them a house.  You give them the IABS at first meet and explain it to them, then they start asking questions as if you represent them.  We are not allowed to contact a seller directly yet by default we work for them when showing their house? That just doesn’t make sense

THERESA AKIN on 04/02/2015

Upon first meeting with a client/customer (at the office), I explain the buyer’s process if they have never been through our states process of purchasing a home. I introduce and explain the IABS and the buyer’s rep agreement.  I try to explain thoroughly both forms.  If they choose not to sign the buyer’s rep agreement then I show them the door and move on.  I won’t work without a buyer’s rep agreement. I know of a couple broker/agents who will not allow their listings to be shown without a customer having a buyer rep agreement in place with someone, even their own brokerage.

Brandon Werst on 04/02/2015

Thank you Mark Sonnier.

Bob Baker on 04/02/2015

I love to see such lively discussion on a topic that perhaps we need to focus on more and that is agency.  My concern with part of the article is that it appears to say or at least imply that if an agent does not represent the Buyer then they must represent the Seller which would have to be by sub-agency if it is not an in house transaction.  I presume this relates to the fact that in Texas an agent providing services that require a license has to represent someone.  However I do not think that sub-agency can be an automatic occurrence.  At least it does say at the end of the article that it is important to obtain permission from the listing broker which gives me hope that we understand sub-agency cannot automatically happen but would have to be agreed to by the two brokers involved.  It is also important that we recognize that since agency is at the broker level then when an agent working WITH an unrepresented Buyer becomes a sub-agent of the listing broker and Seller then so does the agent’s broker and through the general agency relationship that the broker has with all of his/her agents then so do all of that broker’s agents,  So with a brokerage of 300 agents the broker and all of the agents have also become sub-agents of the listing broker and Seller which creates a real challenge if one of those agents happens to have a Buyer client who wants to purse the same property on which their broker is a sub-agent.  I find it the various comments regarding implied and expressed agency interesting and while it is clear that the best practice is to have a written agreement establishing express agency it is also clear that expressed agency can be established orally or in writing.  Of course the challenge with expressed agency not in writing is that fiduciary duties are owed by the agent to the client but there is no enforceability of a commission by the agent against a client.  Thank everyone for their comments and their patience in considering mine.

Scott Neal on 04/02/2015

If you’ve never had a buyer refuse to sign a buyers rep then either 1. You have nothing in there about commission, 2. You didn’t talk about how commission works and just told them to sign it, 3. Told them it doesn’t mean anything, 4. Told them not to worry the seller always pays your commission, or 4. Haven’t met with very many potential buyers.

Justin Moore on 04/02/2015

A buyers rep is an important part of the process.  This protects the buyers agent from poaching and the buyer running off to call a listing agent of a property they have been given information for…As far as Listing Agent representing both sides, i have been there before, and when it comes down to representing you, the buyer, they don’t.  Anything that arises they will be on the side of the seller.  With my experience in the field, i have sinced found how i, as an agent, could have made the transaction work, save for the ignorance of the listing agent i dealt with…

Steve Holzwarth on 04/02/2015

BRA or Denial by the Customer in writing should be required by Law in my opinion.
I use the Dating vs Going Steady analogy. If we aren’t going steady and just dating, then I,  as well as you have no loyalty to each other. If I know I will get paid then I am more likely to drop what I’m doing and give you my all.

Mark Sonnier on 04/02/2015

Judy, I don’t need to take an agency class since I teach Law of Agency 2-3 times per year in my duty as a professor in the real estate department at Houston Community College ( I also have an AAS in Real Estate from HCC). An expressed agency/contract is when you have an agreement in writing. The Buyer’s Rep is an expressed contract and therefore, an expressed agency. An implied agency/contract is an agreement formed from your actions. The buyer considers you their agent because you didn’t say that you weren’t their agent and your actions suggested you were. What you said about the court and liability is legally wrong. My understanding of this come from my current experience as a student at South Texas College of Law.

 

Bobbi Terry on 04/02/2015

Nowadays we are called via Internet advertising ie: Zillow, Realtor.com, to show a property and meet the buyers for the first time at the home. They’ve just met you and not going to sign anything! I agree with previous comment we should have a 1-pg. Buyer Rep. but make it a Specific to that property agreement.

At first meeting I always state to the potential buyer/client that I do not know or represent the sellers, if they’re interested in this property that I would represent them. 

Laura Van Duyn on 04/02/2015

what a difference of opinions!

Dave Turnquist on 04/02/2015

Good points on both sides of the issue here but keep in mind that there is no TREC promulgated Buyer’s Rep Agreement (nor is there a TREC Listing Agreement for Seller Representation), these are TAR Promulgated Forms. If you don’t like the long one that TAR has available then use a different Buyer’s Rep form. I have seen many versions used by different brokerages that they had produced for use by their agents (all the ones I have seen are 1 or 2 pages only). The key here is disclosure (IABS) and Agency Relationship clarity. A simple, brief written statement of agreement between the buyer and the agent can establish, in writing, the Buyer’s Representation status. I’m no attorney, so I had an attorney review my own Buyer’s Rep agreement and it’s only 1 page and very simple.

Bruce Nickell on 04/02/2015

I think the article is still vague but then so is the buyer agency relationship without a written agreement.  TREC needs to create a one page representation agreement.  It is a little intimidating to hand a first time home buyer a 5 page contract at your first meeting with no prior relationship.  It needs to be short and concise like the IABS.  Anyone at TREC listening?

Judy McKee on 04/02/2015

Mark Sonnier you need to take an agency course. Implied agency is liable. Expess agency is what the courts determine if a consumer has sued for damages. If your Broker allows not having the buyer sign an authorized agency representation agreement, than he or she better check with their E&O Insurance. Our industry needs in depth agency training and representation in writing. The law is somewhat liberal in not mandating buyer agency agreements, but the Broker can in their Policy and Procedures.  By not having a Buyer Rep signed, It only opens the door to law suits and consumers not being informed. Our laws and implied laws have changed dramatically over the last 5 years and what WAS no longer applies.

Cynthia I. Lott, GRI.ABR.CHMS.green.BPOR on 04/02/2015

I agree.  The information in the article is technically correct.  However, I still think it is safer to have a written Buyer’s Representation Agreement, and for me, I would never work with a buyer unless it was signed.

Mark Sonnier on 04/02/2015

The article is accurate. You do not have to have a buyers representation agreement to represent a buyer. An expressed or implied agency can be created. Expressed agency is the buyers rep agreement. Implied agency is what the article discusses, in my opinion.

Cynthia I. Lott, GRI.ABR.CHMS.green.BPOR on 04/02/2015

I think the biggest controversy with Buyer’s Representation Agreements is that agents are scared to use them.  When I ask other agents why they do not use this agreement, they typically respond with, “I am afraid the buyer will say no.”  If this document is presented correctly, the buyer will always say yes. 

I always, always, use a Buyer’s Representation Agreement and it is presented at my Buyer’s Consultation.  I have never had anyone refuse to sign.  In the event a Buyer is hesitant, you can always limit the time period.  Also, when you explain sub-agency, it is apparent that this document protects not only the agent, but the Buyer as well.  The Buyer’s Representation Agreement gives written proof that you are in a buyer agency relationship rather than sub-agency.  Thankfully, because I am extremely careful and detail oriented, I have never been sued; however, having worked for many years as a paralegal I know that it is imperative to have signed documents in my file.  Thus, even if buyer agency can be created orally, I think it is a lot safer to have a signed Buyer’s Representation Agreement.

Jean on 03/28/2015

What “permission” are you asking for in the example?

Peggy Santmyer on 03/27/2015

I agree with your article as far as it goes.  I also agree with Judy that encouragement to discuss agency is important.  One question in my mind has always been can an agent be a sub agent if the seller and the listing broker have not offered sub agency.  No offer and acceptance.  If not since TREC says the agent is always representing someone and the agent working with and helping the buyer and has never met the seller doesn’t the agent become an assumed agent of the buyer?  Years ago agents were taught if they did not have a buyer’s rep they always represented the seller.  On an in house listing that is true.  For a seller who has not offered them employment I do not believe it is true at all.

Judy McKee on 03/27/2015

This article misleads an agent and encourages them not to present the IABS notice and discuss agency. First off, sub-agency is alive and well. Agents who do not ask a consumer and receive permission to representation them is a subagent. You do not define create an agency relationship. The industry is encouraging Brokers to train their agents to present the IABS and get the buyer rep agreement signed. Your article shows less importance on this and no responsibility to discuss agency before working with a consumer. Your article puts us back 20 years.


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