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Idaho Law of Agency

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AGENCY LAW IN IDAHO

Prepared by the Idaho Real Estate Commission to explain basic agency issues and your rights as a buyer and seller. Effective July 1, 1996.

When you choose to work with a licensed real estate professional, it is important for you to understand the difference between a licensed broker and licensed salesperson or sales associate and decide on the type of service you need.

A real estate broker is a licensed person who is in charge of the real estate brokerage firm.

A licensed sales associate or salesperson is licensed with the broker and may only act through that broker. In other words, when you choose to work with any licensed individual, your business relationship is legally with that individual's licensed real estate broker.

It is then important for you to discuss the following information with a licensed real estate professional and to agree on the type of business relationship you will have. Will you be a customer or a client? You may or may not want the real estate brokerage to "represent" you. If you DO want to be "represented" you need to become a client. If you choose NOT to be "represented" but to be assisted, you are a customer.

What is a Customer?

A customer receives valuable services from the real estate brokerage (assistance, information, etc.), but is NOT "represented" by it. Every person begins as a customer. If you do not sign a written listing contract or buyer-broker contract, you will NOT become a client, but will remain a customer. As a customer, you can expect the licensed real estate professional (a "nonagent") working with you to:

Provide honest information in good faith;
Assist you in preparing offers and helping you close the transaction;
Use reasonable skill and care; and,
Disclose any adverse material facts the salesperson actually knows, or should reasonably have known (for instance, the seller has told the salesperson that the basement leaks every winter).

As a customer, you should NOT expect the real estate professional you are working with to:

Conduct detailed inspections of the property for you or reverify information given by the buyer of seller; and
Keep your bargaining information confidential. In fact, if the sales associate's brokerage company is representing the other party (buyer or seller) in the transaction, and if you tell the salesperson about your willingness to pay more or take less, that representative must give this information to the broker's client. Whenever you, as a customer, speak to a real estate professional representing another party in a purchase or sale, assume you are talking directly to the other party (buyer or seller).

What is a Client?

A client is a buyer or seller who has signed a written listing contract or buyer-broker type contract to be "represented" by a broker. If there is no written agreement you will NOT become a client! This written contract or agreement should answer:

"How will the brokerage be paid and when?"
"How long am I obligated under this contract?"
"Can I also work with other brokerage companies during this agreement? Or, what will happen if I sell or buy on my own?"
"Am I willing to let this brokerage company represent both me and the buyer (or seller)?"

A client is represented by the broker and his or her sales associates. If you are "represented" as a client, you can expect the real estate professional to:

reasonably act to negotiate the best price and terms for you;
tell you important information the Agent knows or should reasonably have known which would influence your decision to buy or sell (such as the county's plans to build a freeway exit on the land next door);
keep information about your bargaining position confidential in the marketplace; and,
promote your interests with good faith, honesty and fair dealing and use reasonable skill and care in business dealings with you.

Can the Broker Represent Both Buyer and Seller as Clients? Yes, as a Limited Dual Agent This situation comes up, for example, when a brokerage company has your home listed for sale and also represents the buyer. Both of you are clients of the broker, and yet have different needs. The seller wants the highest price, the buyer wants to pay the lowest price. You do NOT have to agree to limited dual representation. It is not the same as having your own agent. If you DO agree, you must do so in writing, and your agent will ask you to sign a Consent for Limited Dual Representation. A limited dual agent will still provide most client services. Without your permission, he or she won't reveal to the other party:

personal information about your motivation to buy or sell;
that as a buyer you will pay more than the offered price;
that as a seller you will take less than the listing price; and,
that you will agree to terms or price other than that listed.

A limited dual agent will avoid conflicting interests of the two clients and will focus on negotiating a sale or purchase that is satisfactory to both. The limited dual agent must use reasonable skill and care, but offers a limited type of representation.