Buyer Sven signs a buyer's agency agreement with Salesperson Liko in Hawaii. Liko's brokerage does not have any listings that match Sven's criteria, so Liko shows Sven a property listed by another brokerage. The cooperating listing broker, Broker Hale, is offering a co-op commission to the buyer's broker. Sven asks Liko: 'Who is paying your commission?' Which of the following most accurately describes the agency and compensation relationship in this Hawaii transaction?
Correct Answer
A) Liko remains Sven's buyer's agent regardless of the commission source, because the source of compensation does not determine the agency relationship under Hawaii law.
Under Hawaii Administrative Rules Title 16, Chapter 99 and HRS Chapter 467, the source of compensation does not determine the agency relationship. A buyer's agent can receive compensation from the listing broker (through a cooperative commission arrangement) while still maintaining full fiduciary duties to the buyer. Liko must disclose the compensation arrangement to Sven, but receiving a co-op commission from Broker Hale does not make Liko a subagent of the seller or create dual agency. The buyer's agency agreement governs the relationship.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
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