When buying or selling real estate, you may find it helpful to have a real estate agent assist you. Real estate agents can provide many useful services and work with you in many different ways. In some real estate transactions, the agent works for the seller. In others, the seller and buyer may each have agents. And sometimes, the same agents work for both the seller and the buyer. It is important for you to know whether the agent is working for you as your agent or simply working with you while acting as an agent for the other party.
The agency relationship is based on one person representing the interest of another person. Real estate agents are licensed by the state to represent a person in the purchase, sale, or lease of a property. The state law relating to agents, the REALTORS® Code of Ethics and general principles of agency law, define the responsibility of the real estate agent.
The type of relationship formed between the agent and the client is called a fiduciary relationship. A fiduciary relationship is one based on trust because the agent owes the following duties to the client: loyalty, diligence, confidentiality, obedience, disclosure, accounting, and reasonable care.
The courts strictly enforce the agency duties so that the client can rely on the agent putting their interests before those of anyone else. The courts also require that the real estate agent be fair and honest to all parties in the transaction.
Throughout the country, most real estate agents have been representing only the seller in real estate transactions. That meant that those agents were representing the Seller, even if they were working with the Buyer. This was accomplished by a system called sub-agency. The real estate company that lists property is called the listing broker. The real estate company working with the buyer is called the subagent or cooperating broker. The company working with the Buyer actually works through the listing broker. Although the buyer had access to a real estate agent, that agent did not legally represent the buyer. The agent becomes a Seller's agent working with a Buyer.