Agency and Brokerage Relationships
This domain tests North Carolina agency relationships, disclosure timing, and fiduciary duties. The exam focuses on the Working with Real Estate Agents Disclosure and on who represents whom.
Core rules
- Agency is a fiduciary relationship created by written agreement. In North Carolina, the Working with Real Estate Agents Disclosure must be given at first substantial contact, before confidential information is shared.
- Seller agency means the broker represents the seller; the buyer is a customer unless a buyer agency agreement exists. Buyer agency means the broker represents the buyer.
- Dual agency means the broker represents both parties. North Carolina requires written consent of both parties and neutral treatment; confidential information of each side must not be used against the other.
- Fiduciary duties include loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care. Material facts about property condition must be disclosed regardless of agency.
- Compensation may be paid by either party; agency status is separate from who pays.
Worked example
A buyer tells a seller's agent, 'I will pay up to $400,000.' The agent represents the seller. The agent must not use that confidential buyer information to the seller's advantage; the buyer is a customer, not a client. If the buyer wants representation, a buyer agency agreement and the agency disclosure are needed.
Traps that cost marks
Assuming the agent who shows a house represents the buyer; confusing dual agency with designated agency; failing to disclose agency at first substantial contact; treating customer service as full representation; and disclosing confidential information without consent.