Wisconsin salesperson Jake works for Lakeside Realty. Jake has a signed buyer agency agreement with client Nina. Nina wants to make an offer on a For Sale By Owner (FSBO) property whose seller, Bob, has no broker representation. Jake contacts Bob to arrange a showing and drafts an offer on Nina's behalf. Bob asks Jake to explain the offer terms and help him understand the contract. Jake provides this explanation. Under Wisconsin law, which statement best describes the agency relationships in this transaction?
Correct Answer
B) Jake represents only Nina as her buyer's agent; Bob is a customer to whom Jake owes honesty and disclosure of material adverse facts, but not fiduciary duties
Under Wisconsin Administrative Code REEB 24 and Wisconsin Statutes Chapter 452, explaining offer terms to an unrepresented seller constitutes a ministerial act and does not create an agency relationship with that seller. Jake remains Nina's buyer's agent. Bob, as an unrepresented party who has not entered into any agency agreement with Jake, is a customer. Jake owes Bob the duties of honesty, fairness, and disclosure of material adverse facts about the property, but not full fiduciary duties. Providing factual explanations of contract terms is a permissible ministerial act that does not trigger multiple representation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
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