Broker Ellen in South Dakota represents buyer client Mike. While searching for properties, Ellen finds a home that is for sale by owner (FSBO) — the seller, Frank, has no listing agent. Ellen shows the property to Mike, and Mike wants to make an offer. Frank agrees to pay Ellen a commission if the sale closes. Which of the following best describes Ellen's agency relationship in this transaction?
Correct Answer
D) Ellen remains exclusively a buyer's agent representing only Mike's interests
Under South Dakota agency law, the source of compensation does not determine the agency relationship. Ellen entered into a buyer representation agreement with Mike and owes fiduciary duties exclusively to Mike. The fact that Frank (the FSBO seller) agrees to pay Ellen's commission does not create an agency relationship between Ellen and Frank. Ellen remains Mike's exclusive buyer's agent and must continue to represent Mike's best interests. She must still provide Frank with written agency disclosure identifying herself as Mike's agent.
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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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