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Agency Law in South Carolina

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In South Carolina, the relationship between a person licensed to practice real estate and a "member of the public" is governed by the Law of Agency, not by contract law. So, what is the difference? Who is a "member of the public"? Just who is an "agent", anyway? What is that "agency form" that "agent" shows you? Do you have to sign it? Should you sign it? What do all those different types of agency mean, and how do I decide what I want to do?

This really isn't complicated. Oh, I know, it can look like it is when viewed as a big block of information, rules, and regulations, but once you break it down, it is fairly simple. Let's start with that term "agent".


Agents: By definition, an agent is one who acts on behalf of another. South Carolina issues licenses to people to act for others in real estate transactions. You might enter into an agreement with someone licensed to practice real estate to have them help you try to sell your house. To do that, you would complete a Listing Agreement. That would make the licensee your agent and you would be the agent's client You  might enter into an agreement with a licensee to help you look for a house. To do that, you would complete Buyer's Agency Agreement. That would make the licensee your agent, and you would be the agent's client. Either of these arrangements must be in writing. Some people will refer to the written agreement as a contract, but it is not; it is an agency agreement and is covered by a different law than contracts. Note that many people looking for a house may ask a licensee to assist them without entering into a written agreement, and many licensees will happily do so. Recognize that no agency was created between these parties. In this case, the "agent" is actually working for the would-be sellers of the homes being shown. For more information on what this means, see the section on Responsibilities.

The Laws: Under contract law, for an agreement to be valid, there must be mutual consideration (each party promises something to the other. A good example is a contract to sell a home or property: the seller promises to deliver a valid deed in exchange for payment. Under the Law of Agency, the agent can agree to do something without any guarantee of compensation. For example, if you list your home through an agent, they agree to advertise, show the home, and do many things to get it sold. You do not agree to do anything unless they actually create a sale. The agent may do a lot of work for nothing if there is no sale. A contract is a promise for a promise; I might promise to give you a deed to my house if you promise to pay for it. An agency agreement is a promise for an act. You might promise to pay someone if they find you a buyer for your house.

You: You are a "member of the public". We all are. The purpose of the South Carolina Real Estate Commission is to protect all of us.

Agency Disclosure BrochureThat Form: The Agency Disclosure Brochure is published by the state of South Carolina. The state requires all licensees to go over this brochure with everyone with whom there is "substantive contact". Just what that means is subject to interpretation.

Originally, the state required the licensee to ask that the form be signed to acknowledge it had been reviewed. That is no longer a state requirement, but some licensees ask for the signature, anyway. You do not have to sign it, but why would you not? It does not commit you to anything. It is not a contract. If the licensee explained it well enough that you do understand it, just provide an autograph and go ahead with what you want to do. Of course, if the explanation was not clear, I wouldn't sign it either. If you do complete a Listing Agreement or a Buyer's Agency Agreement, the agreement will include a statement that you did receive a copy of the brochure.

I think the state has done a pretty good job of explaining the different types of agency in a limited amount of space; so do read the brochure. Basically, you can be either a customer or a client. Just remember that if you are a customer, the licensee is obligated to pursue a transaction that is the best deal for the other guy, because that is who the agent represents.

For a copy of the brochure, click on the button below. Note that the form is designed to be printed on both sides of a sheet and folded in thirds. The document is in PDF (Portable Document Format), which requires Adobe's Acrobat Reader. To download a free copy of Acrobat Reader, visit www.adobe.com and click on Get Adobe Reader.


Single Agency: Every seller that uses an agent is a client. Some buyers are clients (if they completed a Buyer's Agency Agreement) and some are customers. Note that one agent cannot fully serve two clients in one transaction. If an agent for a buyer is to show a listing that was done by himself or another agent within the same office, a conflict is created. The state has created two ways of dealing with this situation.

Dual Agency: This allows the agent to provide service with some limitations. For example, if the agent knows the seller is under the gun to sell, that information may not be revealed to the buyer. Likewise, if the agent knows the buyer is really eager to buy, that information may not be revealed to the seller. The agent cannot use any such information to advise what to do when negotiating a price, but the agent can still give advice based on market value, condition of the property, and other factors. Dual Agency must be disclosed to all parties in writing. If the agent who listed a property is also the one who brought in a buyer as a client, he must be a disclosed dual agent.

Designated Agency: A variation on dual agency. Each client in a transaction can be represented by a different agent within one office. The agents are designated by the broker-in-charge, who is still acting as a dual agent.

Responsibilities of Agent to Client: An agent is required to obey legal instructions, be loyal to the client, disclose all relevant information, keep the client's information confidential, provide an accurate and timely accounting of all funds in any transaction, and provide reasonable skill and care in all dealings.

Responsibilities to a Customer: Remember, if you are a customer, the agent owes those responsibilities to the client (the other party, usually a seller). The agent owes you only accounting, disclosure of known material defects in the property, fairness, and honesty. The agent's loyalty is to that other party, and the agent is required to disclose any information you provide. If you comment that you "really want this house", the agent will tell the seller, who will then be in a stronger position to negotiate.

Responsibilities of a Client: Please treat your agent with fairness and honesty, provide all the information needed to act in your best interest, and make yourself available to respond to offers and counteroffers in a timely way. If you are a seller, make the property available for showing with reasonable notice.

Responsibilities of a Customer: Again, please be fair and honest, but be careful how much information you reveal. And do some interviewing before you sign up an agent!

The South Carolina Real Estate Commission is a part of the Department of Labor, Licensing, and Regulation. Here is their contact information:

Synergy Business Park, Kingstree Building

110 Centerview Drive, Suite 201

Columbia, SC 29210

Telephone 803-896-4400

Web Site: http://www.llr.state.sc.us/POL/REC/

Mail: P O Box 11847, Columbia, SC 29211-1847