Broker Kim in Great Falls, Montana represents seller Dan in the sale of his ranch. A cooperating broker, Agent Ron, brings buyer Lisa to the transaction. Ron has signed a buyer representation agreement with Lisa. At closing, Ron's compensation is paid by Dan through the listing agreement. Under Montana law, who does Agent Ron represent in this transaction?
Correct Answer
C) Ron represents Lisa as her buyer's agent, regardless of which party pays his compensation.
Under Montana law (MCA Title 37, Chapter 51), the source of compensation does not determine agency representation. Ron has a signed buyer representation agreement with Lisa, which establishes that he is Lisa's agent and owes her fiduciary duties. The fact that his compensation flows through the seller via the listing agreement's cooperative commission offer does not change his agency obligation to Lisa.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
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