How are agency relationships formed?
Agency relationships can be formed in two ways: • Express agency: In express agency, the parties (brokerage and client) clearly express their intention to enter into an agency relationship and the agreed terms of that relationship. Consumers can choose to enter into a written agreement with a brokerage (written express agency) or a verbal agreement (oral express agency). Written express agency occurs when a consumer and brokerage enter into a written Brokerage Agreement. The contract authorizes the brokerage to represent the client in the necessary capacity and indicates the details of the relationship. In most situations a written agreement is preferred because it clearly establishes the formation of an agency relationship and offers better protection for both the consumer and the brokerage and its Industry Members. Oral express agency occurs when a consumer and brokerage discuss their agency relationship and agree verbally that the brokerage will represent them. For example, a buyer
