Agency, Contracts, and Transaction Management
What this domain tests
Agency and contracts questions test who represents whom, how Ohio agency is created and disclosed, and how a transaction moves from offer to closing. The broker must manage deadlines, disclosures, and documents.
Core rules
- Ohio agency relationships are with the brokerage, not the individual salesperson. Agency should be created by a written agreement. Ohio requires agency disclosure and informed consent for dual agency.
- A broker may act as a dual agent only with the written consent of both buyer and seller. The dual agent must not disclose one party's confidential bargaining information and must not advocate for one side over the other. Undisclosed dual agency is a disciplinary violation.
- Fiduciary duties include loyalty, confidentiality, disclosure of material facts, accounting, obedience to lawful instructions, and reasonable care. Confidential information may be withheld unless disclosure is required by law or the client consents.
- Sale contracts must satisfy the statute of frauds: written and signed by the party to be charged, with the parties, property description, price, and terms. Contingencies for inspection, financing, appraisal, or sale of the buyer's home need clear deadlines.
- Earnest money should be handled through the broker's trust account. At closing, review the deed, title commitment, settlement statement, prorations, and Ohio conveyance fee.
Worked example
Broker Pat represents the seller. Buyer Ben calls Pat directly and asks, 'What is the seller's bottom line?' Pat may not disclose the seller's confidential negotiating position. Pat is the seller's agent unless Ben signs a buyer agency agreement and Pat's broker agrees to a lawful dual agency with written consent. Even then, Pat cannot reveal the seller's bottom line or Ben's maximum.
Traps
Assuming the salesperson is the agent; oral buyer agency; dual agency without written consent; missing a financing-contingency deadline; treating an inspection contingency as a price renegotiation without a written amendment.