Realtors are governed by the legal concept of “agency”. An agent is legally obligated to look after the best interests of the person he or she is working for. The agent must be loyal to that person. A Realtor may be your agent – if you have clearly established an agency relationship with that Realtor. But often, you may assume such an obligation exists when it does not. Realtors believe it is important that the people they work with understand when an agency relationship exists and when it does not – and to understand what it means. In real estate, there are different possible forms of agency relationship:
Seller's Agent
When a real estate company is a seller’s agent it must do what is best for the sellers of the property. A seller’s agent must tell the seller anything known about the purchaser. For instance, if a seller’s agent knows a purchaser is willing to offer more for a property, that information must be shared with the seller. Confidences a seller shares with a seller's agent must be kept confidential. A purchaser can expect fair service and disclosure of pertinent information about a property. Nothing will be misrepresented about the property. All questions will be answered honestly.
Purchaser's Agent
A real estate company acting as a purchaser's agent must do what is best for the purchaser. A written contract establishes purchaser's agency. It also explains services the Realtor will provide, spells out who will pay and specifies what obligations a purchaser may have. Typically, purchasers will be obliged to work exclusively with that Realtor for a period of time. A Realtor working for a purchaser will keep information about the purchaser confidential from the seller.
Dual Agent
Occasionally a real estate company will be the agent of both the purchaser and the seller. Under this “dual agency” arrangement, the Realtor must do what is best for both the seller and the purchaser. A dual agent must fully disclose information to both the purchaser and the seller. No information will be confidential. A Realtor can be a dual agent only if both the purchaser and seller agree in writing.
Who Pays?
Usually the Realtor is paid from the proceeds of the sale. The listing agreement states the Realtors fee.
When more than one Realtor is involved.
Often, a purchaser will work with one Realtor and a seller with another. It may appear that the Realtor working with the purchaser is working with the purchaser in an agency relationship. That is not necessarily the case. The Realtor working with the purchaser may be a “sub-agent” of the seller. In this case, the Realtor is actually a seller’s agent. While a seller’s agent can provide valuable services to a purchaser, he or she must do what is best for the seller
If a written contract exists with a purchaser, a Realtor can be a purchaser’s agent.
Caution: While every effort has been made to ensure that the information contained in this article is correct, Realtors International Bothasig & Tableview will not be liable for any loss suffered by any person due to any error in the article.
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