Equally confusing on the selling side is termination of agency relationships. Like any agency relationship, a selling side agency relationship lasts for a stated term, for a reasonable time in the circumstances if no term is stated, until the object of the agency is accomplished or otherwise ceases to exist, or until terminated by the parties. In the typical selling side situation where there is no agreement between the agent and the buyer, there is no stated term and it is very hard to say how long a buyer who hasn’t found anything is still “in the market.”
The lack of formality on the selling side makes it difficult, absent completion of the object or termination by the parties, to say how long a selling side agency relationship exists. This uncertainty is, however, tempered by the fact that buyer agency relationships created only by conduct are non-exclusive. This non-exclusivity, coupled with ORS 696.810(4), means it is not a breach of the duty of loyalty to show property to competing buyers.
Non-exclusivity and ORS 696.810(4) are no help, however, when it comes time to write offers for competing buyers. Two buyers competing for the same property means disclosed limited agency rules kick in. Disclosed limited agency disclosure and consent rules make representing two buyers for one property difficult and unusual. A complete discussion of disclosed limited agency can be found in the Agency Disclosure section of this topic
One place where termination of a buyer agency relationship can become an issue is when the agent wants to purchase property that might be of interest to their buyer client. Before purchasing a property of potential interest to a buyer client, an agent must offer the property to the client. This is a function of the duty of loyalty. An agent who represents buyers must, therefore, consider their current list of clients before purchasing property for themselves.
Any uncertainty over who is still a client should be resolved in the client’s favor. That means that prior to purchasing property themselves, buyer agents should determine the property does not meet existing clients’ needs, offer the property to the clients first or terminate the conflicting agency relationships. Of these choices, offering the property to existing clients is the safest if there is doubt about the client’s real estate needs.
Determining what might meet a buyer client’s needs means having a good idea of those needs. If the buyer is looking for an executive home with three baths and five bedrooms and is willing to pay a half a million dollars for it, you don’t have to offer them the little fixer upper you found for yourself over on the “wrong” side of town. If you have clients actively looking for inexpensive property on that side of town, it would be foolish to buy the property without making them aware of it. In between these extremes lie all the rest of your clients. When self-interest is involved, it is wise to err on the side of clients.
Terminating an agency relationship on the selling side does not usually raise the same breach of contract issues as on the listing side. A non-exclusive agency relationship that exists without a contract is pretty much the same as “at will” employment as far as termination is concerned: either party can terminate at any time for any reason or for no reason at all. All that is required is notice to the other party. Although the notice need not be in writing and can even be implied from the circumstances, written notice is always preferable – especially in cases where agent self-interest may be an issue.
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