Business Relationships | RE/MAX Harbor Country
UNDERSTANDING HOW AGENCY WORKS FOR REALTORS®
We believe that it is important that both buyers and sellers understand how the Real Estate Brokerage relationship works.
Broker has several meanings in different situations. Most Realtors are "agents" who work under a "broker." Some agents are brokers as well, either working form themselves or under another broker. In the mortgage industry, broker usually refers to a company or individual that does not lend the money for the loans themselves, but broker loans to larger lenders or investors. As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so.
Real Estate Brokers and their associates are required to disclose any relationship they have with the buyers in a real estate transaction. There are several types of relationships. You should understand these at the time a broker provides specific assistance to you in buying real estate. Buyer’s Agent and Seller’s Agent relationships carry with them legal duties and responsibilities for the broker as well as for the buyer and seller.
A Buyer's Agent acts solely on behalf of the buyer and owes duties to the buyer, which includes the utmost good faith, loyalty, and fidelity. The buyer’s agent will negotiate on behalf of, and act as an advocate for; the buyer. The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to sellers all adverse material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property. A written Exclusive buyer’s agent agreement is required which sets forth the duties and obligations of the parties.
A Seller's Agent acts solely on behalf of the seller and owes duties to the seller, which includes the utmost good faith, loyalty, and fidelity. The Sellers agent will negotiate on behalf of, and act as an advocate for; the seller. The seller is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to buyers or tenants all adverse material facts about the property known by the broker. A separate written listing agreement is required which sets forth the duties and obligations of the parties.
Dual agency is a real estate term that refers to one listing broker representing both the seller and the buyer. Dual agency is not legal in all 50 states. This agent would receive both the buyer and seller commission. This is referred to as a double-ending transaction. A double-ending transaction can happen even if the buyer is represented by an agent other than the listing agent if that agent is also employed by the same broker. An agent acting as a dual agent cannot disclose confidential information to either party. The drawback to a dual agent is that the agent is not acting in just your best interest. It’s not possible for the agent to get the highest price for the seller and the lowest price for the buyer because the agent has to be hands off.