Knowing what an agency agreement means is vital to understanding the role a real estate agent plays, in regard to a real estate transaction.
Every U.S. state has laws that outline what ‘real estate agency’ means and the laws cover buyer agency, dual agency and seller agency. There is the odd state that still has an exception for “facilitators” as no agency relationship has been set up. The foundation of agency law is that it defines a relationship between an agent and his or her client (or principle) and outlines the specific duties of each person.
In the state of Illinois, that agency statute defines the agent’s duties to a client and they include disclosure, accounting, loyalty, obedience, care and confidentiality. All this really means in plain English is that the client’s interests MUST be placed above the agent’s interests. The one exception to this is when the client makes illegal demands.
This is not just a one-sided agreement either, as the client has certain obligations to fulfill as well. For instance, the client (ideally) should treat the agent honestly, pay the agent as agreed, and cooperate to reach their shared goal (e.g. buy a house). Of course, there are going to be instances where the client and/or agent don’t live up to their promises. If this happens, it’s time to speak to a highly qualified lawyer who is able to sort out what went wrong with the agency agreement.
Above all, be sure you have a copy of any agency agreement you have entered into with another person to perform a service. Keep track of any and all financial transactions, notes of meetings, emails, and phone calls. Your lawyer will need to know if the agency agreement was set up for a lawful purpose and what type of agreement was entered into.
An agency may be oral or written (the smart money is on a written agreement) or even implied, through actions or words. Once such an agreement is set up most parties take it seriously. Naturally, if the agent has talked about his or her role, goals, rate of pay, etc. with a customer and they have agreed to work together, that is an agency agreement.
On the other hand, there are situations where there is no agency created; for example, merely answering questions about a situation such as how does the stock market work or replying to questions about an open house. These types of questions are referred to as ministerial and the person asking them is only a potential client.
If any further advice or information is exchanged there is the potential to move from speaking to a potential client to representing the client (particularly if advice is then given.) There is a fine line here and it should not be crossed or an unintended agency relationship might be created.
This is a complex area of the law, and if you have any questions about whether someone truly represents you or not, then it is wise to speak to a qualified, top-notch attorney to discuss concerns about your situation.
Patrick Warwick is the lead content contributor for Chicago bankruptcy firm, The Law Office of Jay F. Fortier, P.C.. To speak with a Chicago bankruptcy lawyer or learn more about creditor rights, Chicago bankruptcy, Chicago bankruptcy lawyer, Chicago bankruptcy attorney, visit Westsidebankruptcy.com