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REAL ESTATE Q&A - SINGLE AGENT VS. TRANSACTION BROKER

Client Question: Can a real estate sales associate transact business with a real estate sales associate working under the same broker if there is an established single agent relationship with the real estate sales associate's brokerage?

Answer: There are two forms of representation available under a Broker license held by a real estate professional according to Florida law: the Single Agent and the Transaction Broker. These two relationships entitle the buyer or seller to different upheld duties by the real estate professional.

A Single Agent is defined by Florida Statutes Chapter 475, Part I as a broker who represents either the buyer or seller of real estate, but not both in the same transaction. It is the highest form, providing the most confidence to the customer that the Realtor represents only the customer's interest.

The duties of a single agent that must be fully described and disclosed in writing to a buyer or seller in agreements for representation include the following:

  • Dealing honestly and fairly
  • Loyalty
  • Confidentiality
  • Obedience
  • Full disclosure
  • Accounting for all funds
  • Skill, care, and diligence in the transaction
  • Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
  • Disclosing all known facts that materially affect the value of residential real property and are not readily observable

Disclosure of these duties must be made before or during entrance into a listing/representation agreement, or before the showing of property.

A transaction broker is defined as a broker who provides limited representation to a buyer, a seller or both, in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.

In a real estate transaction using a transaction broker, the buyer or seller are not responsible for the acts of a licensee, and both parties give up their rights to the undivided loyalty of a licensee.

This kind of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller; providing however, that a licensee should never work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.

The duties of the transaction broker include the following:

  • Dealing honestly and fairly
  • Accounting for all funds
  • Using skill, care, and diligence in the transaction
  • Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer
  • Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
  • Limited confidentiality, unless waived in writing by a party, that prevents disclosure of the motivation of any party for selling or buying property, any party's willingness to agree to financing terms other than those offered, or of any other information requested to remain confidential
  • Any additional duties that are mutually agreed to with a party

Section 475.278(1)(b), Florida Statutes, presumes that a licensee is operating as a transaction broker, unless the customer and broker establish a single agent or no brokerage relationship, in writing.

A single agent relationship may be changed to a transaction broker relationship at any time during the relationship between an agent and principal, provided the agent first obtains the principal's written consent to the change in relationship.

If a single agent relationship or a transaction broker relationship is not established, the licensee is known to have a no brokerage relationship and owes the following duties to the buyer or seller of real estate:

  • Dealing honestly and fairly
  • Disclosing all known facts that materially affect the value of the residential real property which are not readily observable to the buyer
  • Accounting for all funds entrusted to the licensee

Written disclosure in relationship between broker and buyer or seller must be of the same size type or larger as other provisions of the document and must be conspicuous in its placement to advise customers of the duties of a licensee with a buyer or seller. These licensee disclosure requirements apply to the sale of all residential property.

Real estate disclosure requirements do not apply:

  • When a licensee knows that the potential seller or buyer is represented by a single agent or a transaction broker
  • In nonresidential transactions
  • In the rental or leasing of real property
  • During unanticipated casual conversations between a licensee and a seller or buyer which do not involve eliciting confidential information
  • In situations in which a licensee's communications with a potential buyer or seller are limited to providing general factual information, appraisals and dispositions of any interest in business enterprises or business opportunities, except for property with four or fewer residential units

Pursuant to Florida Statutes Chapter 475, Part I, a real estate sales associate may not accept or give an offer from or to a real estate sales associate working under the same broker if the client has established a single agent relationship with that brokerage. If a sales associate working under the same broker desire to enter into negotiation with another sales associate in that brokerage, the sales associate acting as a single agent would first need to obtain written consent from their client in order to change their relationship to a transaction broker. Upon becoming a transaction broker, the two agents may then and only then enter into negotiation on the interested property.

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