Listing agent, buyer’s agent, dual agent… These are the types of representation Realtors can offer buyers and sellers in the real estate process. Agency is an extremely important factor in any real estate transaction. So allow us to explain what these terms mean.
When the sellers retain the services of their own listing agent to act on their behalf to sell their home, it is seller representation. The seller must sign a listing agreement in order to have the agent and their company represent them in the transaction. The listing agreement outlines how the listing agent and brokerage will be compensated. It also details what portion of the fee will be “co-oped” to the agent bringing the buyer. When you see an agent’s sign in a yard selling a house, it shows seller representation. The agent for the seller is often referred to as the listing agent or the seller’s agent.
Buyer representation occurs when a buyer retains the services of an agent to act on their behalf. A buyer broker agreement must be signed in order for the agent to represent the buyer. Otherwise, all agents in our area always represent the seller as they pay the commission. This means that agents cannot answer contract questions or advise you on anything related to the process unless you have a buyer broker agreement signed. Again, the seller pays the commission in our market, so it is likely all the buyer is responsible for is an administrative fee to the buyer agent’s brokerage.
Dual Representation is when the same agent represents both the buyer and the seller in one transaction. For example, Realtor Jane has a listing on Main Street. Jane’s buyers Sam and Sara decide they love the Main Street home and want to purchase it. In this scenario, Jane would be a dual agent. Both the buyer and the seller must agree when they sign their listing and buyer agency agreements to see houses (or show their house) to clients of their agent. All clients then must consent again to the arrangement once they are at the contract stage. If one or both parties is not comfortable with the situation, the realtor can recommend bringing in another agent.
When a buyer and seller in the same transaction are represented by different agents affiliated with the same brokerage, it is called Designated Representation. For example, the seller has a listing agent named Mary with XYZ Realty. The buyer has a buyer broker agreement with a XYZ Realty agent named Joe. Each of these agents, Mary and Joe, are designated representatives and fully represent the interests of their client. The broker of the firm, XYZ Realty, would then become a dual agent since the buyer agent and listing agent are both agents at their firm with signed agreements.
In our area, agency is a significant issue.
It defines the way we can advise clients and consumers.
If you have any questions about what agency means or what the agreements entail, please contact us. We’re happy to walk you through the process and answer any questions.
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