What Type of Broker?
Single-party broker or a Transaction broker?
Although the term "real estate agent" is still commonly used by the public, under the Brokerage Relationship Act, which became effective on November 1, 2000, the common law principals of agency were abrogated, or were replaced by a specific statute that sought to clarify the legal relationships created when a person works with a real estate broker or sales associate. One of the most obvious changes made by the statute is that real estate brokers and sales associates are no longer considered "agents". When transacting business under the old laws of agency, a buyer or seller was represented by an agent, and could be held legally liable for improper or illegal actions or words of that agent while the agent worked on their behalf. The new law created two types of legal relationships between the consumer and his or her broker.
The first relationship is called a Single Party Broker. This arrangement is similar to the old agent/client relationship under common law. The broker is required to obey the buyer or seller's specific directions, and is required to perform his duties for the benefit of the party he works for. Under this arrangement, the buyer or seller could incur legal liability for actions or words of the broker working on his or her behalf. To work with a broker as a single party broker, the buyer or seller must enter into a written representation agreement specifically stating that a Single Party Broker relationship is being created.
The second type is called a Transaction Broker relationship. Under this arrangement, the broker is not considered to be representing the interests of the party he is working for, but is assisting that party in meeting his or her goals in the transaction without being an advocate for the party. The other key feature of this relationship is that the party being assisted is not considered to be legally liable for the acts of the broker working on his behalf. To create a Transaction Broker relationship, you may enter into a written agreement with the broker, but it is not required. Under the law, if no written agreement between the broker and the buyer or seller has been created, then a Transaction Broker relationship exists.
Regardless of the type of brokerage arrangement, the real estate broker must perform within the terms of the written brokerage agreement (if one exists), treat all parties with honesty, obey all rules of the Oklahoma Real Estate License Code and all other applicable laws and rules, and exercise reasonable skill and care in his or her handling of the real estate transaction. The broker must not reveal confidential information of one party to another, unless given explicit permission to do so. The sort of confidential information referred to in this case would be that a party is willing to accept less or pay more for a home than what has been offered, that a party would agree to different financing terms than those offered, or the buying or selling motivation of either party. Pertinent facts or defects about the property are not considered confidential, and if known, must be disclosed by the broker and the seller of the home.
It is important the consumer knows and understands the types of brokerage relationships available and their differences, so that an informed decision can be made as to which arrangement will best serve the consumer's needs. While the Single Party Broker arrangement does carry some potential legal liability, this potential liability was also present under the agency laws of the past. The Single Party Broker arrangement is designed to create a relationship allowing the broker to perform services to benefit the interests of the party employing the broker. The Transaction Broker arrangement creates a relationship where the broker assists the party employing the broker in a neutral manner. The broker is considered to be facilitating the transaction, without favoring one party over the other, and the law states that the employing party cannot be held liable for the acts of the broker.
