I know that we have discussed this information in the past, but we thought that it would be good for review. When you as the customer and an agent enter into a discussion regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you with wish to have with the agent in the transaction.
You should know that there are 3 types of relationships: A Seller’s Agent, a Buyer’s Agent and an Agent Representing Both Seller and Buyer (also known as Dual Agency).
A Seller’s Agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller’s Agent has the fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. A Seller’s Agent is obligated not to reveal, unless told otherwise by the Seller, confidential information obtained from the Seller to any other party. Doing so could jeopardize the sale of the home, negotiations and/or final sales price.
A Buyer’s Agent can, with buyer’s consent, agree to act as agent for the Buyer only. A Buyer’s Agent has the fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer. A Buyer’s Agent is obligated not to reveal, unless told otherwise by the Buyer, confidential information obtained from Buyer to any other party. Doing so could jeopardize the purchase of the home, negotiations and/or final sales price.
An Agent Representing Both Seller and Buyer can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both parties. This type of agency has a fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with both Buyer and Seller.
There are a few Buyers and Sellers that believe they can save some money by using one Agent who will represent both sides in a transaction. This is true and the Agent has to do their best in keeping a fiduciary duty to both parties civil. In these instances, however, how does one agent negotiate for both sides? How does one agent keep confidential information from both parties? Obviously, the Buyer wants a good deal and the Seller wants the best value, but where is their representation? Picture this… If you take someone to court, are you going to use their lawyer?
Our advice is to make sure you have an agent representing you and only you. This way his/her fiduciary duty is to take care of your needs, negotiate to only your terms, and close a transaction with your satisfaction.