Agency At The Hometown Brokerage Overview ✓ Solved

Agency at the Hometown Brokerage Overview: Under

Under common law, the duties agents owe to principals are known as fiduciary duties. In this assignment, you will analyze a fictional scenario involving real estate agency relationships to determine if the agent fulfilled her fiduciary duties to the principal in this transaction.

The scenario involves Jowell, a new real estate agent, working for Hometown Brokerage. She interacts with Mrs. Murphy, a potential buyer, and considers the agency relationships between the seller, the buyer, and Jowell. You are tasked with explaining these relationships, identifying any omitted steps, assessing Jowell's legal obligations, and advising on how she should negotiate based on those responsibilities. Your analysis should be a minimum of 400 to 600 words, including citations in APA format. Ensure proper spelling and grammar before submitting.

Paper For Above Instructions

Introduction

Understanding agency relationships and fiduciary duties is fundamental in real estate transactions. These legal obligations govern the conduct of agents towards their principals—both sellers and buyers—and shape how negotiations, disclosures, and duties are performed. This analysis evaluates a scenario involving Jowell, a real estate agent, and her interactions with Mrs. Murphy, providing an assessment of her fiduciary responsibilities, possible omitted steps, and appropriate negotiation strategies based on legal commitments.

Agency Relationships in the Scenario

The scenarios involve two primary agency relationships: one between the seller and Jowell, and another between Jowell and Mrs. Murphy. The seller, through listing agreement, employs Jowell as the listing agent. This establishes an agency relationship where Jowell owes fiduciary duties to the seller, including loyalty, obedience, disclosure, confidentiality, and reasonable care.

Jowell also has a separate agency relationship with Mrs. Murphy as her buyer’s agent, created when Mrs. Murphy signs an agreement authorizing Jowell to represent her interests in the transaction. This dual agency, in which Jowell represents both parties, creates complex fiduciary obligations, primarily related to disclosure and loyalty. According to real estate law, agents must act in the best interests of their respective clients, maintaining confidentiality and honest disclosure in their dealings.

Omitted Step in the Interaction

At the start of her interactions, Jowell omitted an essential step: a thorough disclosure of her agency relationship status and the scope of her authority to both parties. Proper practice requires that agents clearly explain the nature of their agency, whether they represent the seller, the buyer, or both in the case of dual agency. Failure to disclose this information could impact informed decision-making by the clients and potentially lead to conflicts of interest or legal liabilities.

Legal Commitments of Jowell to Seller and Buyer

Jowell’s legal obligations to the seller include loyalty—acting in the best interests of her client—and confidentiality regarding the seller’s motivation and minimum acceptable price, unless disclosure is authorized or legally required. She must also exercise care in accurately listing the property at a market-appropriate price, based on comparable sales, and present all offers fairly.

To the buyer, Jowell’s fiduciary duties include obedience—following the buyer’s lawful instructions—disclosure—revealing all material facts about the property and transaction—and confidentiality—keeping the buyer’s financial capacity and motivation private. She must also exercise reasonable care by evaluating offers and providing expert guidance without acting as legal counsel or making legal judgments.

Negotiation Strategy Based on Fiduciary Responsibilities

Given her obligations, Jowell should approach negotiation with transparency and fairness. She should disclose her dual agency status to both parties and clarify her duties and limitations. Her role is to facilitate bargaining while avoiding any conflicts of interest that could compromise her fiduciary duties.

In negotiating the price for Mrs. Murphy, Jowell must balance her loyalty to her seller-client by informing her of the buyer’s maximum willingness to pay and her duty to present offers objectively. She should advise her seller on realistic expectations, considering the current market value and comparable sales, rather than encouraging overreach that might jeopardize the sale.

On behalf of Mrs. Murphy, Jowell should disclose any known facts that could influence her client’s decision, such as the seller’s minimum acceptable price or any issues with the property. She should guide Mrs. Murphy on making a competitive but fair offer, ensuring that the process adheres to legal and ethical standards.

Conclusion

In conclusion, a real estate agent’s fiduciary duties are critical to maintaining ethical standards and protecting all parties involved. Jowell’s responsibilities to her seller and buyer encompass loyalty, disclosure, confidentiality, and reasonable care. By acknowledging these duties, making full disclosures, and avoiding conflicts of interest, she can negotiate effectively and ethically. Recognizing omitted steps, such as clear disclosure of agency relationships at the outset, is essential to ensure legal compliance and trustworthiness in real estate transactions.

References

• Jennings, M. M. (Year). Real Estate Law, 11th Edition. Retrieved from vbk://
• Brody, M. & Matysiak, D. (2018). Real Estate Principles. McGraw-Hill Education.
• National Association of Realtors. (2020). Code of Ethics and Standards of Practice. NAR.
• Couch, R. (2019). Fundamentals of Real Estate Practice. Dearborn.
• Geltner, D., Miller, N., & Washington, S. (2021). Commercial Real Estate Analysis and Investments. OnCourse Learning.
• Reilly, F., & DeWitt, G. (2017). Fundamentals of Real Estate Investment & Development. CFA Institute.
• Keown, A. J., & Martin, J. D. (2019). Financial Management: Principles and Practice. Pearson.
• American Bar Association. (2020). Real Estate Law. ABA Publications.
• Case Law: Queiroz v. Harvey, 2015
• Warren v. Merrill, 2016