Agency, Brokerage, and Fiduciary Duties
Representation is the point, not payment
Agency is the relationship in which a licensee acts for a client and owes fiduciary duties. Illinois expects brokerage relationships to be documented in writing, and the licensee must disclose in writing whom he or she represents before the consumer signs a listing agreement or an offer. The fiduciary duties are usually memorized as COLDAC: care, obedience, loyalty, disclosure, accounting, and confidentiality. Confidentiality survives termination of the relationship.
Clients versus customers: every consumer is entitled to honesty, fairness, disclosure of known material facts affecting value, and an accounting for money handled; only clients get advocacy, confidentiality, and full loyalty. Compensation does not create the relationship - a buyer's agent paid through a cooperative split from the listing side still represents the buyer, not the seller.
Dual and designated agency. Representing both sides in one transaction requires the informed written consent of all parties. Illinois also permits designated agency, in which two licensees sponsored by the same broker each represent one side under a written brokerage policy; the individual licensees are not dual agents. A firm may instead act as a disclosed non-agent, owing only the general duties above.
The sponsoring broker is responsible for supervising sponsored licensees and for escrow and trust funds. A licensee may not accept compensation for brokerage activity from anyone other than the sponsoring broker.
Trap: a stem saying the licensee 'showed the buyer homes for six weeks' invites you to answer that the buyer is a client. Without a written buyer agency agreement, that buyer is a customer.
Rule of thumb: if loyalty or obedience would require a licensee to lie, hide a material defect, or discriminate, the duty stops - fiduciary duties never override law or the general duty of honesty.