Although buyer agency by written agreement is becoming more prevalent in the industry, the majority of agency relationships with buyers still do not involve written agreements. Instead, the buyer and the agent simply start interacting and at some point during that interaction an agency relationship is created. This manner of doing business makes it very difficult to determine exactly when a selling side agency relationship is established.
Unless there is a writing, figuring out when a business relationship becomes an agency relationship involves determining when consent was given and acted upon. That is, at what point the principal (here the buyer) manifested consent for the agent to act on their behalf and the agent consented by acting on that manifestation. Establishing an agency relationship by conduct instead of contract means depending on who says and does what, when. It is for this reason that the establishment of buyer agency relationships remains a matter of confusion in the industry.
Fortunately, when exactly an agency relationship is established on the selling side rarely matters. First, without it in writing, the relationship is not exclusive – hence the old industry saying: “nobody owns a buyer.” By the time a buyer identifies a particular property and attempts to purchase it, there is (unless there is something in writing to the contrary) no doubt the agent “working with” the buyer has established an agency relationship. Until the buyer identifies property and decides to purchase, nothing likely has happened to cause the buyer, or the agent, serious damage. Thus, the lack of certainty as to when an agency relationship begins on the selling side causes few, if any, real problems.
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