Agent Flores of Dubuque Realty enters into a buyer representation agreement with the Petersen family. During the search, the Petersens fall in love with a property listed by Dubuque Realty — the same firm where Flores works. Broker Walsh of Dubuque Realty wants to handle this as a designated agency transaction. Agent Flores will represent the Petersens, and Agent Kim (the listing agent) will represent the seller. However, the Petersens refuse to consent to designated agency or any form of dual agency. What is the MOST appropriate course of action under Iowa law?
Correct Answer
A) Agent Flores must withdraw from representing the Petersens and refer them to an agent at a different brokerage
Under Iowa law, designated agency and dual agency both require the written informed consent of all parties. If the Petersens refuse to consent to designated agency or dual agency, the transaction cannot proceed with Dubuque Realty representing both parties. Because both the buyer and seller are clients of the same brokerage and consent is not forthcoming, the most appropriate resolution is for Agent Flores to withdraw from representing the Petersens and refer them to a buyer's agent at a different, unaffiliated brokerage. This protects the Petersens' right to full, unconflicted representation and avoids a violation of Iowa agency law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
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