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Tuesday, 03 April 2007 |
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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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