Agency Relationships Explained

When choosing a sales representative to work with to Buy or Sell a home it is important that they explain what your options are as far as their Professional relationship with you and you with them. This is commonly referred to as “Agency Disclosure”.

Establish at your first meeting whether you are going to be in a CUSTOMER or a CLIENT relationship with your REALTOR®.

Here is a brief explanation of Agency.

• Agency/Agency Relationship: When you ask a REALTOR®, as a buyer or a seller, to represent you in a transaction this establishes an Agency Relationship. In the case of a Seller it is a Client relationship established when you sign the listing agreement. As a Buyer the REALTOR® will discuss with you the difference between being a Client or a Customer. You will be asked to sign a document stating that this has been explained to you and also stating what relationship, either Client or Customer, you will have with the Sales Representative.
• Single Agency:  This is the most common form of Agency when a REALTOR® represents a single client’s interests exclusively in a transaction.
• Dual Agency:  Once in a while a REALTOR® may find themselves in the position of having to represent both the Buyer and the Seller in a transaction (e.g. the buyers representative may also be the listing sales representative of the property the buyer is interested in buying or the listing is represented by the same real estate brokerage). A document will need to be signed by both clients – “informed consent” – before proceeding with the transaction, acknowledging that both clients (Seller & Buyer) are aware of the situation & agree to it.
• Client:  When you ask a REALTOR® to be your Sales Representative, they will represent your interests in the purchase, sale, rental or exchange of a property or a business. You are entitled to full fiduciary responsibility – which include such duties as loyalty, confidentiality, full disclosure of all pertinent facts, duty of care, accountability and obedience to all lawful instructions
• Customer: A customer is someone who has NOT entered into an agency relationship with a REALTOR® and have chosen to be a customer. As a customer you are entitled to be treated fairly, honestly and with due care at all times. However, as a customer you DO NOT enjoy fiduciary duties and the many benefits of a Client-Agent relationship.
• Fiduciary Responsiblities: An REALTOR® owes their principle (i.e. client) various fiduciary duties such as competence, confidentiality, good faith and full disclosure, and full accounting.