Understanding Agency Relationships

When buying and selling a home, it is important to understand the legal responsibilities your real estate agent has to you and to other parties in the transaction. Below are the various types of relationships you may have...


Seller's Representative (Listing Agent)

A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller and outlined in a listing contract.


Buyers Representative (Buyer's Agent)

A buyer's agent is hired by the prospective buyers to represent them in a real estate transaction. The buyer's agent works in the buyer's interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or through a commission split with the seller's agent.



A subagent owes the same fiduciary duties to the agent's customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer's agent, shows a property to the buyer. In such cases, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer/customer can expect to be treated honestly by the subagnet. It is important that a subagent fully explain their duties to buyers.


Disclosed Dual Agent

Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual agency relationship, it is vital that all parties give their informed consent. A disclosed dual agency is legal as long as all parties are aware of the relationship.


Designated Agent (Appointed Agent)

This is a brokerage practice that allows the managing broker to designate which licensees will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of a dual-agency relationship. The designated agents give their clients full representation, with all of the attendant fiduciary duties. 












*Credit given to realtor.org