How is a typical intermediary relationship created, and how does it operate?

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At the time of the first substantive dialogue with a seller or a prospective buyer, the salespersons or brokers associated with a firm would provide the parties with a copy of the statutory information about agency required by The Real Estate License Act (TRELA). The statutory information includes an explanation of the intermediary relationship. The brokerage firm would negotiate a written listing contract with a seller and a written buyer representation agreement with a buyer. In those documents, the respective parties would authorize the broker to act as an intermediary and to appoint associated licensees to work with the parties in the event that the buyer wishes to purchase a property listed with the firm. At this point, the broker and associated licensees would be functioning still as exclusive agents of the individual parties. The listing contract and buyer representation agreement would contain in conspicuous bold or underlined print the broker’s obligations set forth in Section 1101.651(d) of TRELA. When it becomes evident that the buyer represented by the firm wishes to purchase property listed with the firm, the intermediary status would come into play, and the intermediary may appoint different associates to work with the parties. The intermediary would notify both parties in writing of the appointments of licensees to work with the parties. The associates would provide advice and opinions to their respective parties during negotiations, and the intermediary broker would be careful not to favor one party over the other in any action taken by the intermediary.

Source: TAR

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