Straight Answers About A Real Estate Agents Role Know The Players To understand agency, it helps to first know the names of the players. A "broker" is a person who has passed a special exam to earn the designation and is licensed by the state. Typically a principal broker forms a real estate company and recruits real estate licensees (salespersons and associate brokers) to the company as associates (often called "agents"). When an associate represents the principal broker in a transaction – rather than the principal broker personally working with the client – the principal broker gives a percentage of the brokerage commission to the associate. Agent and Principal Legally speaking, an agent is the person who represents and acts on behalf of another person, called the principal. The agent owes certain duties to the principal. These duties include undivided loyalty, reasonable care, confidentiality, full disclosure, obedience, and accurate accounting. Sellers Agent A real estate agent who is employed by and represents only the in a transaction is a "sellers agent." This agent is also known as a "listing agent" because the agent lists the home for sale and generally markets it through a Multiple Listing Service. The listing agreement serves as a contract between the seller and the agent, and spells out how the sellers agent will be paid. Responsibilities of a sellers agent include getting the highest purchase price and best terms possible for the seller. A sellers agent can offer buyers a variety of services, including a diligent search to find the right home, an explanation of available financing, calculation of monthly payments and estimated settlement costs, etc. The sellers agent is expected to act honestly and in good faith and disclose to the buyer all facts which materially affect the property. However, a sellers agent cannot divulge confidential information to the buyer that is not in the best interest of the seller, such as what price the seller will accept or offer an opinion of what the homes value. In many instances, a subagent of a sellers agent produces a buyer for the home. Although the subagent is often first contacted by a potential buyer and works hard to help the buyer find the right home to purchase, the subagent – like the sellers agent – represents the seller during negotiations and is responsible for getting the best terms possible for the seller. Buyers Agent A real estate agent who is employed by and represents only the buyer is a "buyers agent". The agreement between the buyer and the buyers agent serves as a contract between them and typically spells out the agents duties and how the agent will be paid. The buyers agent may be paid by the seller through a commission split with the listing agent or paid a sales commission by the buyer or buy some mutually agreed-upon formula. Some buyers agents may also (or instead) charge the buyer a retainer or hourly fee for services. In addition to helping the buyer with the house hunting process, the responsibilities of a buyers agent – unlike those of the sellers agent or sub agent – include negotiating the best price and terms for the buyer. Disclosed Dual Agent A real estate agent who is representing both the buyer and the seller with the knowledge and written consent of both is a "disclosed dual agent". While these agents still give their best effort to marketing the sellers home, dual agents cannot give either the buyer or the seller undivided loyalty or disclose any confidential information. Dual agency occurs, for example, when a buyer working with a buyer’s agent wants to purchase an in company listing; that is, a home listed by the company of the buyers agent. All agents in the company are automatically agents of the seller by virtue of their association with the listing company in most states. Even though the buyer and seller are working with different associates from the company, the real estate company and both associates then have a dual agency relationship with both the buyer and the seller. The broker and associates may not share without permission what price a seller would accept nor how much a buyer is willing to pay. When a dual agency relationship occurs, the buyer and seller must agree to modify the agency relationship. Though the relationships have changed, the basic goals haven’t: the seller wants to sell, the buyer wants to buy, and the agents want to help close the transaction.
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