Real estate sale forms typically begin with a statutorily required Final Agency Acknowledgment form. The acknowledgement is strictly a creature of statute. The statute, ORS 696.845, reads as follows:

696.845 Acknowledgment of existing agency relationships form; rules. When signing an offer to purchase, each buyer shall acknowledge the existing agency relationships, if any. When a seller accepts or rejects an offer to purchase in writing, each seller shall acknowledge the existing agency relationships, if any. An agent to the real property transaction shall obtain the signatures of the buyers and the sellers to the acknowledgment, which shall be incorporated into or attached as an addendum to the offer to purchase or to the acceptance. The Real Estate Agency shall prescribe by rule the form and content of the acknowledgment of existing agency relationships.

As required by ORS 696.845, the Real Estate Agency has developed a form for final agency acknowledgement. The acknowledgment appears at the top of most standardized real estate contracts. If acknowledgement is not incorporated into the sale form itself, it must be appended to the contract as an addendum. Whether incorporated or appended, the acknowledgement must be in substantially the following form:

(1)___________(Name of Selling Licensee) of ______________ (Name of Real Estate Firm) is the agent of (check one) __ The Buyer exclusively. __ The Seller exclusively (“Seller Agency”). __ Both the Buyer and the Seller (“Disclosed Limited Agency”).

(2) ____________________ (Name of Listing Licensee) of ______________ (Name of Real Estate Firm) is the agent of (check one) __ The Seller exclusively. __ Both the Buyer and the Seller (“Disclosed Limited Agency”).

(3) If both parties are each represented by one or more licensees in the same real estate firm, and the licensees are supervised by the same principal broker in that real estate firm, Buyer and Seller acknowledge that said principal broker shall become the disclosed limited agent for both Buyer and Seller as more fully explained in the disclosed Limited Agency Agreements that have been reviewed and signed by Buyer, Seller and Licensee(s).

Buyer shall sign this acknowledgment at the time of signing this Agreement before submission to Seller. Seller shall sign this acknowledgment at the time this Agreement is first submitted to Seller, even if this Agreement will be rejected or a counter offer will be made. Sellers signature to this Final Agency Acknowledgment shall not constitute acceptance of the Agreement or any terms therein.

ACKNOWLEDGED

Buyer: ________ Print _________________Dated: ________

Buyer: ________ Print _________________Dated: ________

Seller: ________ Print _________________Dated: ________

Seller: ________ Print _________________Dated: ________

The statute requires the buyer to acknowledge the existing relationships when signing their offer. The seller must sign the acknowledgement when they accept or reject the offer. The first question, of course, is does the buyer acknowledge the seller’s agent or just their own? How about the seller? Is the seller acknowledging their relationship with the listing agent or that and the buyer’s relationship with the selling agent? Does it matter?

It is unlikely the Legislature actually intended the final agency acknowledgement form to have anything to do with the creation or termination of agency relationships. At the time the law was enacted (1993), a big issue in the industry was buyers assuming the agent they were working with represented them when, in fact, the agent represented the seller as a subagent of the listing agent. This sub-agency relationship applied even when the agent did not work for the listing firm. The final agency disclosure was intended to inform the buyer of the true status of the agent assisting them in writing the offer. It was little more than an after thought that the seller should acknowledge the same thing.

Today’s complicated agency relationships make the agency acknowledgment all but a relic of the past. In most transactions, the buyer has their own agent and the seller their own. Increasingly, both these agency relationships are already acknowledged in formal documents like listings or buyer service agreements. When dual agency is involved, the parties will have already signed disclosed limited agency agreement that spell, out in complete details, the relationships involved. The final agency acknowledgment assumes relationships that are not based on explicit consent. Such relationships are rare in real estate today, calling into question the continued utility of the acknowledgement requirement.

Notwithstanding the questionable utility of a final agency acknowledgement, it will likely be around for many years to come. Careful explanation of actual agency relationships at the time they are formed will continue to make dealing with final acknowledgment a simple mechanical filling in of the blanks. Although in most situations filling in the blanks themselves present few problems, there is some confusion around unrepresented parties and the difference between disclosed limited agency and designated agency.

The final agency acknowledgment form drafted by the Real Estate Agency assumes the buyer and seller are each represented. When one or the other is unrepresented, the blanks in the form are simply inapplicable. For that reason, the best approach is marking each blank “NA” or “NONE” when dealing with an unrepresented party. That way, no blanks are left to create confusion or room from subsequent inappropriate entries. Filling in the final agency acknowledgement properly is, however, not enough when dealing with an unrepresented party. Additional special procedures should always be used when dealing with unrepresented parties. Click here for a detailed discussion of those procedures.

The final agency acknowledgment requirement predates the development of disclosed limited agency and designated agency. Click here for an explanation of disclosed limited and designated agency. The advent of disclosed limited and designated agency was handled by adding to section (3) to the acknowledgment form. The agency relationships to be selected by the buyer and seller did not, however, change. The choices of agency relationship remained: buyer exclusively, seller exclusively and both buyer and seller on the selling side and seller exclusively and both buyer and seller remained the choices on the listing side. This has lead to some confusion about how to fill out the acknowledgment in designated agency situations.

As explained in Working With Clients, designated agency is a special statutory form of dual agency. By statute, however, only the principal broker becomes a disclosed limited agent. The listing and selling agents represent only the party with whom they already have an agency relationship. ORS 696.815(4). Under the statute, the brokers acting as designated agents “continue to represent only the party with whom the broker has an agency relationship unless all parties agree otherwise in writing.” Because the designated agents continue to represent only the principal they already have, their representation is “exclusive” for purposes of filling out the final agency acknowledgment.
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