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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.
Reprinted
with permission from Real Estate Checklists and Systems,
www.realestatechecklists.com.
Reprinted
from Realtor(R)Magazine Online permission of the NATIONAL
ASSOCIATION OF REALTORS(R) Copyright 2005. All rights
reserved.
www.realtor.org/realtormag.
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