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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.
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