Laws of Agency
Agency is a fiduciary relationship created when a principal authorizes an agent to act on the principal's behalf. It can arise by express agreement, implication from conduct, ratification, estoppel, or operation of law. In West Virginia, a brokerage relationship for the sale of real estate should be reduced to writing and disclosed to the parties early in the transaction.
Fiduciary duties
Old Car: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care - plus skill, honesty, and good faith. Confidentiality survives termination of the relationship; loyalty does not permit undisclosed self-dealing at any time.
Types of agency
Seller agency (listing), buyer agency, disclosed dual agency, designated agency, and non-agency or facilitator roles. Dual agency requires informed written consent from both sides and necessarily limits advocacy. A designated-agency brokerage assigns different licensees to represent each side.
Compensation
Commission is negotiable and established by contract between broker and client. A broker may share compensation with another broker through the MLS or a written agreement. A salesperson may never accept compensation from anyone except the employing broker.
Traps
Confidentiality versus disclosure: you must reveal material facts but must not reveal your client's motivation or price ceiling. Undisclosed dual agency is a discipline magnet. Remember that the salesperson's client is legally the broker's client.
Rule of thumb: if you cannot advocate fully for both sides, get written consent to limited representation or refer the client out.