A real estate broker has a listing agreement with a seller. The broker also has a buyer client who expresses interest in the listed property. The broker obtains written consent from both the seller and the buyer to represent both parties in the transaction. What specific type of agency relationship has been established in this scenario, and what are the limitations on the broker's actions?
- ADual agency; the broker can advise both parties on pricing and negotiation.
- BIntermediary agency; the broker cannot give advice or opinions to either party unless associates are appointed.
- CDesignated agency; the broker appoints herself as the agent for both parties.
- DFacilitator agency; the broker acts as a neutral party and cannot represent either party's interests.
Show answer & explanationAnswer & explanation
Correct answer: B. Intermediary agency; the broker cannot give advice or opinions to either party unless associates are appointed.
In Texas, representing both sides of a transaction by a single broker with written consent is known as Intermediary Agency. A key limitation of unappointed intermediary agency is that the broker cannot give advice or opinions to either party. If the broker wishes to give advice, they must appoint separate, licensed associates to each party.
Why the other options are wrong
- A. Dual agency is prohibited in Texas. While it involves representing both, the limitations on advice are different in Texas's intermediary model.
- C. Designated agency is a concept where the broker designates different agents to represent each party, but the broker themselves is still the intermediary and the scenario describes the broker representing both, not just designating.
- D. While an intermediary acts neutrally regarding advice (if unappointed), it is a form of agency (broker represents both parties), not merely a facilitator role which typically implies no agency at all.
Intermediary Agency (Texas)
A Texas-specific agency relationship where a broker represents both the buyer and the seller in the same transaction, requiring written consent and specific limitations on providing advice.
- Requires written consent from both parties.
- Broker cannot give advice or opinions to either party (unless associates are appointed).
- Broker must treat both parties fairly and honestly.
Memory trick: Intermediary: One broker, two clients, no advice (unless appointed guides).