A Michigan buyer signed a buyer representation agreement with Sunrise Realty. The buyer later finds a for-sale-by-owner (FSBO) property she wants to purchase. Sunrise Realty's broker contacts the FSBO seller and offers to assist with the transaction. The seller agrees to pay the broker a fee. Which of the following BEST describes the agency situation that now exists?
Correct Answer
D) Dual agency exists because Sunrise Realty now represents both the buyer and the seller in the same transaction
Dual agency is not limited to situations where a formal listing agreement exists. When Sunrise Realty's broker agrees to assist the FSBO seller and the seller agrees to pay the broker a fee, the broker has effectively taken on representation of the seller. Because Sunrise Realty already represents the buyer under a buyer representation agreement, the brokerage now represents both the buyer and the seller in the same transaction — creating dual agency. Informed written consent from both parties is required under MCL 339.2517.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
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