Prescott Valley AZ Real Estate - How are Agencies Created
January 11th, 2008
Typically there are two primary requirements for the creation of an agency; the first being the ability of the parties which means that the principal can give the agent the power to do what the principal has the power to do. There also must be legal purpose for the agency.
How are agencies created?
There are basically four ways to create an agency. In real estate agencies are created by appointment, this is known as an expressed agency an oral or written agreement. Often times a listing agreement is used as the tool to create an agency between the seller and the brokerage. The buyer representation agreement creates an agency between the buyer and the buying agent.
Actions or conduct by the parties can create an implied agency. For example, if Susan Smith, an owner of a home, requests Mike Jones to assist in selling her home, this creates an implied agency. If Mike finds someone to purchase the home and Susan argues that there was no listing agreement in writing, Mike has a very good chance to prevail in court and collect the commission.
An ostensible agency, agency by estoppel is created when a principal states through words or action to a third party that someone is the principal’s agent and the third party relies on it. In this case, the principal will not be able to stop this agency.
The final way an agency is created is that of agency by necessity which is created in the case of an emergency when the consent of the principal may be unnecessary to create an agency.
You can learn about real estate agency here.
Entry Filed under: Prescott Arizona AZ Real Estate Market
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