When is an agency relationship created?

An agency relationship is created when a broker accepts employment under a single agency agreement. This formalizes the relationship between the broker and the client, establishing a legal obligation for the broker to act in the best interest of the client. The single agency agreement outlines the duties and responsibilities of the broker, ensuring that the client receives full representation and the broker works diligently on their behalf.

While receiving a phone call from a potential client may indicate interest, it does not establish an agency relationship until a formal agreement is reached. Completing a transaction, on the other hand, occurs after the agency relationship has been created, so it is not a defining moment for establishing that relationship. Lastly, a verbal agreement may suggest intent to work together, but without the formalization of a written agreement, the specific fiduciary responsibilities and protections that come with an agency relationship are not invoked. Thus, the correct point at which an agency relationship is recognized is when the broker has accepted the terms of the single agency agreement.