Understand Agency Relationships
It’s important to understand what legal responsibilities your real estate
salesperson has to you and to other parties in the transaction. Ask what type
of agency relationship your agent has with you:
Seller's
representative (also known as a listing agent or seller's agent)
A seller's agent is hired by and represents the
seller. All fiduciary duties are owed to the seller. The agency relationship
usually is created by a listing contract.
Buyer's
representative (also known as a buyer’s agent)
A buyer’s agent is hired by prospective buyers to
represent them in a real estate transaction. The buyer's rep works in the
buyer's best interest throughout the transaction and owes fiduciary duties to
the buyer. The buyer can pay the licensee directly through a negotiated fee, or
the buyer's rep may be paid by the seller or through a commission split with
the seller’s agent.
Subagent
A subagent owes the same fiduciary duties to the
agent's customer as the agent does. Subagency usually arises when a cooperating
sales associate from another brokerage, who is not the buyer’s agent, shows
property to a buyer. In such a case, the subagent works with the buyer as a
customer but owes fiduciary duties to the listing broker and the seller.
Although a subagent cannot assist the buyer in any way that would be
detrimental to the seller, a buyer-customer can expect to be treated honestly
by the subagent. It is important that subagents fully explain their duties to
buyers.
Disclosed
dual agent
Dual agency is a relationship in which the brokerage
firm represents both the buyer and the seller in the same real estate
transaction. Dual agency relationships do not carry with them all of the traditional
fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties.
Because of the potential for conflicts of interest in a dual-agency
relationship, it's vital that all parties give their informed consent. In many
states, this consent must be in writing. Disclosed dual agency, in which both
the buyer and the seller are told that the agent is representing both of them,
is legal in most states.
Designated
agent (also called appointed agent)
This is a brokerage practice that allows the
managing broker to designate which licensees in the brokerage will act as an
agent of the seller and which will act as an agent of the buyer. Designated
agency avoids the problem of creating a dual-agency relationship for licensees
at the brokerage. The designated agents give their clients full representation,
with all of the attendant fiduciary duties. The broker still has the
responsibility of supervising both groups of licensees.
Nonagency
relationship (called, among other things, a transaction broker or facilitator)
Some states permit a real estate licensee to have a
type of nonagency relationship with a consumer. These relationships vary
considerably from state to state, both as to the duties owed to the consumer
and the name used to describe them. Very generally, the duties owed to the
consumer in a nonagency relationship are less than the complete, traditional
fiduciary duties of an agency relationship.
Upon first substantative contact your agent should provide you with a copy of that State's Agency Disclosure Brochure.
You can view my Buyer Agency Services here.
Sue Lucas
Broker Associate
Re/Max Southern Shores
843-997-4595
Reprinted from
REALTOR® magazine (REALTOR.org/realtormag)
with permission of the NATIONAL ASSOCIATION OF REALTORS®.
Copyright 2008. All
rights reserved.
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