What Is Express Agency In Real Estate? Definition & Examples

What Is Express Agency In Real Estate? Definition & Examples

Express agency in real estate refers to an agency relationship that is created and communicated between a principal (property owner) and an agent (real estate agent or broker) through a written or oral agreement.

This agreement expresses the intentions of both parties to establish an agency relationship. While both written and oral agreements are valid in establishing express agency, signing a written agreement, such as a listing agreement or buyer’s agreement, is the safest and legally binding option for both the principal and the agent.

Key Takeaways:

• Express agency in real estate is a formal agency relationship between a property owner and a real estate agent or broker.
• An express agency can be created through a written agreement or an oral agreement, but a written agreement is recommended for legal protection.
• Examples of express agency in real estate include property sales and purchases.
• Other types of agency relationships in real estate include implied agency, agency by estoppel, agency by ratification, agency by necessity, and agency coupled with an interest.
• Understanding express agency is essential for both property owners and real estate agents to navigate the legal complexities of the real estate industry.

How Is Express Agency Created in Real Estate?

Express agency in real estate can be created through a written agreement or an oral agreement. While both methods are acceptable, signing a written agreement, such as a listing agreement or buyer’s agreement, is highly recommended as it provides a clear and legally binding record of the agency relationship.

This protects both the principal and the agent in case of any disputes or misunderstandings in the future. The written agreement outlines the terms and conditions of the agency relationship and ensures that both parties are aware of their rights and obligations.

When establishing express agency through a written agreement, it is important to include essential details such as the duration of the agreement, the scope of the agent’s authority, the agreed-upon commission or fees, and any exclusivity clauses. This helps to avoid any ambiguity and provides a solid foundation for the agency relationship.

Alternatively, express agency can also be created through an oral agreement. However, oral agreements can be more challenging to enforce and may lead to disagreements or misunderstandings. It is recommended to document the terms of the oral agreement in writing as soon as possible to avoid any potential disputes down the line.

Overall, whether through a written or oral agreement, creating an express agency relationship in real estate is crucial for establishing clear expectations and responsibilities between the principal and the agent. It is a legally binding arrangement that protects both parties and ensures a smoother transaction process.

Examples of Express Agency in Real Estate

Express agency in real estate is a common occurrence in the industry, with various scenarios involving the sale and purchase of properties. Here are some real-life examples of express agency:

1. Property Sale: When a property owner decides to sell their property, they may enter into a listing agreement with a real estate agent. This agreement establishes an express agency relationship between the owner and the agent, giving the agent the authority to market and sell the property on behalf of the owner.
2. Property Purchase: On the buyer’s side, express agency can also be created when a buyer enters into an agreement with a real estate agent. This agreement allows the agent to represent the buyer’s interests in finding and purchasing a suitable property.

Express agency in these examples is established through the written agreements signed by both parties. These agreements clearly outline the rights and responsibilities of the principal and the agent, ensuring a legally binding relationship.

By creating express agency relationships, both property owners and buyers can benefit from the expertise and professional representation of real estate agents. Agents can provide valuable advice, market knowledge, and negotiation skills to help clients achieve their real estate goals.

Table: Express Agency Examples

Different Types of Agency Relationships in Real Estate

When it comes to agency relationships in real estate, there are various types to consider. In addition to express agency, which is established through a written or oral agreement, there are other important categories to be aware of.

One common type is implied agency, where the actions of the parties involved indicate an agency relationship, even without a formal agreement. This can occur when a real estate agent provides services to a buyer or seller without explicitly stating that they are acting as their agent.

Agency by estoppel is another type that arises when one party represents another as their agent, and a third party relies on this representation. For instance, if a seller’s agent makes a statement about a property’s condition that influences a buyer’s decision, an agency relationship may be created.

Agency by ratification occurs when a principal approves and adopts an act done on their behalf by another person. This can happen when an agent makes a decision or signs a contract on behalf of the principal, and the principal later accepts and acknowledges those actions.

Furthermore, there is agency by necessity, which arises when one party makes decisions on behalf of another who is unable to do so. This type of agency relationship often occurs in situations where a property owner is unable to represent themselves, such as due to physical or mental incapacity.

Lastly, there is agency coupled with an interest, which occurs when an agent has a personal interest in the property being sold. This type of agency relationship typically arises when an agent has invested in the property or has a financial stake in its sale.

Understanding these different types of agency relationships in real estate is essential for both buyers and sellers. Each type carries its own implications and responsibilities, so it’s crucial to consult with a real estate professional or legal expert when navigating these arrangements.