Agency Relationships in Michigan – Vocabulary Review

This set of vocabulary flashcards covers essential terms and concepts related to agency relationships, disclosure requirements, fiduciary duties, and brokerage operations in Michigan real estate practice.

Agent

Someone authorized to represent a principal (client) in dealings with third parties and owing fiduciary duties.

Principal (Client)

The person who grants authority to an agent to act on their behalf in a real estate transaction.

Fiduciary

A person in a position of trust held to high standards of good faith, loyalty, and confidence.

Customer

A third party to the transaction who is not a principal but is entitled to honesty, fairness, disclosure of material facts, and accounting.

Affiliated Licensee

A salesperson or associate broker licensed under, and associated with, a particular real estate broker.

Specific Agent

An agent authorized to perform one specific transaction for a principal.

General Agent

An agent with broad authority to represent a principal in a range of matters; salespersons are general agents of their employing broker.

Traditional Agency

An agency model in which the broker and all affiliated licensees have the same agency relationship with the firm’s clients.

Designated Agency

An agency model that names one or more licensees as a client’s exclusive agents, excluding other affiliated licensees from that agency relationship.

Dual Agent

A broker or salesperson who represents both the buyer and the seller in the same transaction with written, informed consent.

Supervisory Broker

An associate broker identified in a designated agency agreement to oversee the agents involved.

Transaction Coordinator

A licensee who assists with administrative details of a sale without creating an agency relationship with either party.

Subagent

A cooperating broker who acts on behalf of another broker’s client, owing that client fiduciary duties.

Buyer’s Agent

A licensee who represents and owes fiduciary duties to the buyer in a real estate transaction.

Seller’s Agent

A licensee who represents and owes fiduciary duties to the seller in a real estate transaction.

Agency Disclosure Form

A document that identifies whom the agent represents and obtains consumer consent regarding confidential information handling.

Service Provision Agreement

A written employment contract between a client (buyer or seller) and broker that establishes an agency relationship.

Listing Agreement

A service provision agreement between a seller and broker to market the property; must be written, include an expiration date, and a nondiscrimination clause.

Buyer’s Agency Agreement

A service provision agreement establishing a broker’s agency relationship with a buyer, detailing duties and compensation.

Limited Service Agreement

A written agreement where the client knowingly waives certain statutory services otherwise owed by the broker.

Net Listing

An illegal arrangement in Michigan where the seller sets a net price and the broker keeps any excess as commission.

Public Act 299 of 1980

Michigan law requiring disclosure of agency relationships, timing of disclosure, and consumer consent regarding confidential information.

Substantive Contact

The point at which an agent must make agency disclosure—first meaningful conversation involving property or financial specifics.

Common-Law Fiduciary Duties

Obedience, loyalty, disclosure, confidentiality, accountability, and reasonable care owed by an agent to a client.

Statutory Duties (to Client)

Michigan-mandated duties including reasonable care, performance of agreement terms, loyalty, compliance with laws, timely accounting, referrals, and confidentiality.

Statutory Services (to Client)

Required services such as marketing property, presenting offers, assisting negotiations, and aiding in transaction completion and closing statements.

Transaction Broker (Nonagency)

Another term for transaction coordinator—provides information and administrative help without advocacy or fiduciary duties.

Informed Written Consent

Mandatory written permission from both parties before a licensee may act as a dual agent.

Broker Supervision

A broker’s legal duty to direct, review, and guide affiliated licensees’ regulated activities through regular communication and written policies.

Obedience

A fiduciary duty requiring the agent to follow the client’s lawful instructions.

Confidentiality

A fiduciary duty that survives agency termination, prohibiting disclosure of client information without permission or legal requirement.

Reasonable Care and Skill

A fiduciary and statutory duty obligating agents to perform their work with competence and diligence.