Knowing who represents whom in a real estate transaction is one of the most important factors you will want to know before you engage in buying or selling a home.

One of the first things you as a buyer or seller will want to know is who the real estate agent represents.  

As Realtors it is one of the first things out of our mouths is to explain what agency means. There are different types of real estate agencies that are offered. 

What is a buyer’s agency? A buyer agent represents the buyer as a client. The agent owes their buyer client undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability.  The agent must put their buyer’s interest first and attempt to negotiate terms acceptable to their buyer client. We explain that if we show one of our listings, we owe our allegiance to the seller. A seller’s agent cannot divulge any private or personal information to the buyer.  Now let’s go a step further. What if the buyer decided that they would like to purchase one of the properties we have listed (representing the Seller). It is at that time another agency may be introduced. This agency is called a designated agency.  

What is a designated agency? It is an agency relationship under which two different agents of the same broker represent two different clients with opposing interests in the same transaction. Remember, a designated agency mainly comes into play when you are working with a buyer, and they decide to purchase one of your personal listings. There are times the buyer will not want another agent involved and will want to be a customer. As a customer, they will make their own decisions and represent themselves. The agent will then have the buyer sign a form indicating that they will become a customer in the transaction.   

What is a selling agency? The agent represents the seller as a client. The agent must put the Seller first and attempt to negotiate terms acceptable to their seller client. The loyalty, obedience to the law, etc. is described in the buyer’s agency information included in this article.

Dual agency. When you consider that buying or selling a home is probably one of the biggest financial decisions of your life, a dual agency is one agency you may not want to consider.  A dual agency is where a real estate agent may represent both parties. The agent shall be neutral regarding any conflicting interest of the seller and buyer.  This we find is only asking for trouble and a possible law suit.  As agents, we represent a buyer or a seller.  Agency law differs from state to state. It is important to understand how agency law works in your state and the agency you are working with. Dual agency means conflict of interest. Make sure you understand in a real estate transaction who represents whom when signing any documents.

To conclude our explaining the different types of agencies, we would suggest that you hire a Realtor who has your best interest in mind. You can demand that the agent not engage in dual agency with you. 

THOUGHT FOR THE DAY: You don’t have to look far to see a miracle. What could be more supernatural than a caterpillar turning into a butterfly, an egg yolk into a chicken, an acorn into a mighty oak.