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State of Tennessee
Agency Relationships Available by Law in Tennessee
(An Explanation of Agency Terms)
While ABuyer’s Best Choice Realty
offers only Exclusive Buyer Agency Representation to clients, other
real estate firms may offer one or more of the following agency
relationships: NOTE: NO AGENCY can be an Exclusive Buyer Agency if
they EVER accept any listings!
DESIGNATED AGENT for the BUYER:
The individual licensee is
working as an agent for the BUYER in this consumer’s prospective
transaction, to the exclusion of all other licensees in his/her
company. Another licensee in the company may represent a SELLER as
a DESIGNATED AGENT for the SELLER, and the BUYER Agent will continue
to advocate for the best interests of the BUYER, according to
Tennessee law. An agency relationship of this type cannot, by law,
be established without a written agency agreement.
{{NOTE}} AGAIN this is not considered by
consumer advocates to be in the best interest of the client!
If someone else in the same company serves a Seller client as a
DESIGNATED AGENT for the SELLER, then both the seller and the buyer
are being “represented” by the SAME AGENCY again. This is
somewhat like opposing sides in a lawsuit being represented in court
by different lawyers IN THE SAME FIRM. Throughout the
country, there are some states that will not allow this type of
representation, because consumer protection groups oppose this form
of representation for BOTH parties, claiming that it violates the
“Common Law of Agency” and is “NOT IN THE BEST INTEREST of either
CLIENT.”
AGENT for the BUYER:
(NOTE: this is not necessarily an
Exclusive Buyer Agent, because… if the agency accepts listings, the
agent is NOT an EBA)
The licensee’s company is working as an agent for the BUYER and owes
primary loyalty to the BUYER and will advocate for the best interest
of the BUYER, until and unless the agent wishes to show (or the
buyer wishes to see) an in-house or company listing, at which time,
the Agent for the Buyer has to “default” to ‘DESIGNATED AGENT
for the BUYER’ Status, or not represent the client for those
listings as an AGENT for the BUYER. Consumer protection groups
oppose the defaulting to designated agency status, since once again
both the seller and the buyer are being “represented” by the SAME
AGENCY. And once again, this is somewhat like opposing sides in
a lawsuit being represented in court by different lawyers IN THE
SAME FIRM.
******EXCLUSIVE
BUYER AGENCY******:
EXCLUSIVE BUYER AGENTS AND
their COMPANIES always represent ONLY Buyers, NEVER represent
Sellers, NEVER list properties, NEVER “default” to another type of
representation, and DO NOT HAVE A CONFLICT of INTEREST! Most
consumer advocates recommend this type of agency representation as
the better representation for Buyers. ABuyer’s Best Choice Realty
can provide prospective buyers with links to sites, organizations,
consumer groups, legal cases, and news reports that have touted EBA
as the preferred method of buying property without a conflict of
interest.
DISCLOSED DUAL AGENCY:
(DUAL AGENCY is one
of the most controversial agency relationships and is outlawed in
many states! In Tennessee, this form of “representation” is only
allowed when it is DISCLOSED in writing to ‘INFORMED’ (??) buyers
and sellers.) The reason that
this is NOT a preferred method of representing buyers and sellers,
according to consumer advocates, can be best summed up by the
quotation that “No one can serve two masters!” A DISCLOSED DUAL
AGENT ‘supposedly’ represents both parties as clients. As stated in
Tennessee law, “because of loyalties owed to both parties in these
consumers’ prospective transaction, the licensee(s) involved in a
disclosed dual agency relationship cannot legally serve as advocates
for either party, to the detriment of the other party in the
transaction. This is similar to or could be analogous to the SAME
LAWYER (not just law FIRM!) representing both the prosecution and
the defense in the same law suit! Or, try having an IRS agent
represent you in a dispute… with the IRS!! Some people jokingly
refer to this type of agent as a “Double Agent” but for buyers, this
is no joke!
AGENT or SUBAGENT for the SELLER:
The licensee’s company is working as an agent for the property
SELLER and owes loyalty to the SELLER. Even if the licensee is
working with a prospective buyer to locate property for sale, rent,
or lease, the licensee AND his/her company are legally bound to work
in the best interests of any property sellers whose property is
shown to this prospective buyer. An agency relationship of this
type cannot, by law, be established without a written agency
agreement. (This type of agency relationship offers the best type
of representation for SELLERS, according to consumer advocates.)
DESIGNATED AGENT for the SELLER:
The individual licensee is working
as an agent for the SELLER or property owner in this consumer’s
prospective transaction, to the exclusion of all other licensees in
his/her company. Another licensee in the company may represent a
buyer as a DESIGNATED AGENT for the BUYER, and the Seller Agent will
continue to advocate for the best interests of the property owner or
SELLER. An agency relationship of this type cannot, by law, be
established without a written agency agreement.
{{NOTE}} If someone else in the
company serves a buyer client as a DESIGNATED AGENT for the BUYER,
then both the seller and the buyer are being “represented” by the
SAME agency. This is somewhat like opposing sides in a lawsuit
being represented in court by different lawyers IN THE SAME FIRM.
Throughout the country, there are some states that will not allow
this type of representation, because consumer protection groups
oppose this form of representation for BOTH parties, claiming that
it violates the “Common Law of Agency” and is “NOT IN THE BEST
INTEREST of either CLIENT.”
FACILITATOR:
A FACILITATOR is NOT an agent
for EITHER party! In other words, the licensee’s company is NOT
working as an agent for EITHER party in the consumers’ prospective
transaction. Therefore, NEITHER party receives “client level
services” in the transaction. The FACILITATOR CANNOT advise or
advocate for either party, is neutral, and merely “facilitates” the
sale and purchase and collects a commission upon closing. (Since
neither party receives client level services, this is not considered
a generally recommended means of purchasing or selling property,
unless the Seller and Buyer are highly informed with regards to
Comparative Market Analyses (CMA’s), real estate transactions in
general, and other real estate services that are generally provided
to clients when they buy or sell property, and do not want advice or
assistance in making decisions regarding such areas as offers,
counteroffers, reasonable acceptance prices, protective clauses
needed by individual clients as special stipulations, etc.
{By law, any licensee or company who
has not entered into a written agency agreement with either party in
the transaction is considered a FACILITATOR until such time as an
agency agreement is established.}
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