Understanding agency and the different types of relationships is really important when you decide to work with a real estate professional. Whether you’re a buyer or seller, you need to know the basics. Who represents your interest and who doesn’t?
Buyer Agency
When buyer agency exists, a real estate agent represents the home buyer and has a fiduciary duty to work on their behalf and in their best interest.
• Negotiating the best pricing
• Protecting buyers interests
• Disclosing pertinent information that might influence the buyers decisions.
• Working with all buyers, without bias, regardless of race, color, religion, sexual orientation, color or national origin.
Seller Agency
When seller agency exists an agent is working in the best interest of the seller. Surprisingly, even the buyer’s agent who draws up a contract and presents that offer on behalf of the buyer represents the best interest of the seller.
Responsibilities of a seller’s agent are nearly identical to that of a buyer’s agent. Protecting buyer’s interests, obtaining the best pricing and disclosing important and influential information to a seller are all part of the agent’s duty.
Dual Agency
Dual Agency exists when a company has a relationship with both the seller and the buyer. This can occur when a home buyer chooses to represent themselves and not seek the help of a buyer’s agent.
When an agent represents both the seller and buyer, there must be informed consent; in other words, the buyer must understand that the agent is working on behalf of both the seller and buyer. The agent/broker responsibilities include:
• Non-disclosure of how much the seller will accept or how much the buyer is willing to pay.
• Disclose information to one party that might put the other at a disadvantage.
Dual Agency With Designated Sales Associates
This type of agency relationship is similar to a Dual Agency in that one company or broker has a relationship with both the seller and buyer and there needs to be informed consent. Typically, one designated sales associate is assigned to represent the seller and another to represent the buyer; in other words, both the seller’s and buyer’s agent work for the same real estate company. However, each have a fiduciary duty to the buyer and seller, respectively.
It is important to note that neither written nor verbal agreement is necessary to establish an agency relationship and compensation is not required for a relationship to exist.
