In most real estate transactions, a real estate agent is involved. It is important to know who is representing whom. There are four types of agent representation:
Seller’s Agent- When a seller enters into a listing contract with a real estate broker to sell his home, the seller becomes the broker’s client, and all fiduciary obligations are to that seller. The broker is legally required to act in the client’s best interests, to follow his instructions, to present any and all earnest money commitments in a timely manner, and to obtain for the client the best possible price and terms for the client’s property.
Buyer’s Agent- A buyer’s agent represents the buyer in the purchase, and there is a fiduciary duty to the buyer of loyalty, obedience, disclosure, confidentiality, reasonable care and diligence, and accounting in dealing with the buyer. However, there is no contract between the buyer and the agent.
Buyer’s Broker- When a buyer enters into a Buyer’s Broker Contract with a real estate broker to purchase a home, that buyer becomes the broker’s client, and all fiduciary obligations are to that buyer. The broker is legally required to act in the client’s best interests, to follow the client’s instructions, to present any and all offers in a timely manner, and to obtain for the client the best possible price and terms for the client’s property. This is a solid commitment between the buyer and broker. It allows the broker to pursue unlisted and for-sale-by-owner properties as well.
Disclosed Limited Agent- In situations where the listing company of the seller is also the broker for the buyer, the broker may give limited representation to both the seller and the buyer. However, in all instances, the in-company agent has the following obligations to both the parties: loyalty, obedience, disclosure, confidentiality, and accounting in dealings with both the seller and the buyer. However, in representing both parties, the agent will not, without express written permission of the respective party, disclose to the other party, any information that would compromise either party’s position. The agent must use reasonable care and diligence with both the buyer and seller, and be honest in all dealings.
If you desire legal advice, consult an attorney.
