It’s important to understand what legal responsibilities
your real estate salesperson has to you and to other parties
in the transactions. Ask your salesperson to explain what
type of agency relationship you have with him or her and
with the brokerage company.

1. 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.

2. Subagent. A subagent owes the same fiduciary duties
to the agent's principal as the agent does. Subagency
usually arises when a cooperating sales associate from
another brokerage, who is not representing the buyer as a
buyer’s representative or operating in a nonagency
relationship, 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.

3. Buyer's representative (also known as a buyer’s
agent). A real estate licensee who 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 by a commission split with the listing broker.

4. 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 the 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.

5. Designated agent (also called, among other things,
appointed agency). 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.

6. 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.

Go Back To Seller's Tips Index
Go To Homepage