Delaware Agency Law: What Real Estate Exam Candidates Must Know

Delaware agency law has some unique features compared to other states — particularly the "transaction licensee" role — that frequently appear on the Delaware state exam. Here's a complete overview.

The Four Agency/Representation Options in Delaware

1. Seller's Agent (Listing Agent) The listing broker and their salespersons represent the seller exclusively. Fiduciary duties run to the seller: - **Loyalty** — advocate for the seller's best interests - **Obedience** — follow the seller's lawful instructions - **Disclosure** — reveal all material facts to the seller - **Confidentiality** — protect the seller's private information - **Accounting** — account for all funds - **Reasonable care** — use professional skill

The listing agent cannot disclose the seller's minimum price, motivation to sell, or willingness to accept less than the asking price to a buyer or buyer's agent.

2. Buyer's Agent The buyer's agent represents the buyer and owes fiduciary duties to the buyer. This must be established through a written buyer agency agreement in Delaware.

A buyer's agent cannot disclose to the seller: the buyer's maximum price, motivation to buy, or willingness to pay more than the offering price.

3. Dual Agent When the same broker (or same brokerage in a small firm) represents both buyer and seller in the same transaction. Delaware law permits dual agency only with **informed written consent** from both parties.

A dual agent owes duties of fairness and cannot fully advocate for either party. A dual agent cannot: - Disclose the seller's minimum price to the buyer - Disclose the buyer's maximum price to the seller - Recommend a specific price to either party

4. Transaction Licensee (Facilitator) This is Delaware's version of a non-agent facilitator. A transaction licensee assists both parties in the transaction **without representing either party in an agency capacity**. This is a non-fiduciary role — the transaction licensee owes duties of: - Honesty and fair dealing - Disclosure of known material defects - Accounting for funds

A transaction licensee does NOT owe the full fiduciary duties (loyalty, obedience, confidentiality) that agents owe.

Key exam point: The transaction licensee is NOT an agent of either party. Both parties must consent to this arrangement in writing.

Agency Disclosure in Delaware

Delaware requires licensees to disclose their agency status in writing at the time of first substantive contact with a consumer. The disclosure must explain: - Who the licensee represents - What duties the licensee owes to whom - The consumer's options for representation

Designated Agency

Delaware permits designated agency, where a broker designates different agents within the same firm to represent buyer and seller separately. This avoids dual agency within the firm. Each designated agent owes full fiduciary duties to their designated client.

Subagency

Subagency — where cooperating brokers become subagents of the listing broker — still exists in Delaware law but is rarely used in practice. In subagency, the cooperating broker owes duties to the seller, not the buyer.

Key Facts to Memorize

• Written buyer agency agreement required for buyer representation
• Transaction licensee = non-agent facilitator (unique to some states, tested in Delaware)
• Dual agency requires written consent from both buyer AND seller
• Agency disclosure must be made at first substantive contact

For Delaware agency scenario practice questions, visit [CARealestate.com/states/delaware](https://carealestate.com/states/delaware).