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
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)
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 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
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)
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)
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.
REALTORMAG with permission of the NATIONAL ASSOCIATION OF REALTORS
Copyright 2008 All rights reserved.