HOW TO DIAGRAM A PROBLEM: The simplest way to learn how to diagram is:

1. Draw a t-shape on a blank sheet of paper

2. Label one side at top for the Seller, and Label the other top side for the Buyer (any order)

Example: Seller | Buyer

Question: Sally as the listing associate. Sally successfully acquires for Bay Realty an exclusive listing of a three-bedroom town house from her friend George. At the first open house conducted by Sally, prospective buyer Betty discusses the property with Sally. Sally initially discloses to Betty that she is an agent of the seller and furnishes Betty with the TREC Information About Brokerage Services notice. Later that night, Sally prepares an offer from Betty on George's property, which George later accepts.

DISCUSSION: In this case, Bay Realty clearly represents George only. No facts indicate that Bay Realty has become an implied agent of Betty because of any of Sally's actions. No law prohibits in-house sales or requires that Sally suggest that the buyer hire another broker to prepare the offer. Sally can show the property, explain its features, and deliver the buyer's offer without creating any implied agency with the buyer-in fact, that's her job. However, Sally must tell Betty when they first meet that she is the agent of the seller and that she does not represent Betty. Although Sally presents Betty with the IABS Notice that explains the different capacities in which an agent can act on behalf of a party in a real estate transaction, she is not required by TRELA Section 1101.558(c)(3) to provide the notice at an open house. However, the notice must be presented if there is substantive discussion between Sally and Betty about other property. If Sally fails to provide the agency disclosure, then Sally would expose herself to TREC disciplinary action and possible liability in a civil lawsuit.