Agency, Brokerage Relationships, and Fiduciary Duties
Who represents whom
Agency is a relationship in which a licensee acts on behalf of a client with the client's authority. It can be created expressly (a written brokerage agreement), by implication from conduct, by ratification when the principal accepts the benefit of an unauthorized act, or by estoppel when a third party reasonably relies on appearances. Compensation never creates agency by itself; the agreement does.
The cast. A client is represented; a customer is not. Single agency represents one side. Dual agency represents both and requires the informed written consent of all parties. Designated agency assigns different licensees within the same brokerage to each side, but the broker-in-charge remains the dual agent at the entity level. Many states, including Nebraska, also permit a licensee to act as a nonagent who performs ministerial services without representing either party - always with written disclosure.
Fiduciary duties. Care, obedience, loyalty, disclosure, confidentiality, and accounting. Confidentiality survives termination of the relationship; a licensee may not later reveal a client's motivation or financial position to the other side.
Other duties. Reasonable care and skill, disclosure of known material defects, written agency disclosure before the parties commit, presenting all offers promptly, and accounting for funds.
Traps
Questions love the listing agent who shows her own listing to an unrepresented buyer, then starts advising the buyer. Advising a customer as if you represent them can create an undisclosed agency. Likewise, a licensee who receives a referral fee from a service provider without disclosure breaches loyalty and may violate consumer protection rules.
Worked example
A buyer asks the listing agent to 'look out for me.' The agent must either decline and stay a seller's agent, obtain written consent from both parties to a dual agency, or have the broker designate another licensee for the buyer.
Rule of thumb: disclose early, disclose in writing, and disclose again when the role changes.