Understanding All Types of Real Estate Agencies
Listing agents represent sellers. They have a signed listing agreement with the seller to get them the highest price and best terms for their property. They regularly list properties, advertise them, and hold open houses. And although listing agents may also serve a buyer, the buyer is a customer – not a client. Therefore, buyers cannot expect a listing agent to promote their best interest or keep their information confidential. Most importantly, a listing agent’s sole objective is to sell you a house.
Dual agents represent both buyers and sellers in a single transaction. This situation creates a conflict of interest, because a single agent is representing opposing sides of the transaction. Neither the buyer nor the seller can count on the loyalty or confidentiality of the agent.
Disclosed Dual Agency:
In disclosed dual agency the company’s representation duties are limited because a buyer and seller have recognized conflict of interest created by dual agency. It says that the company and its associated licensees cannot advocate one client over the other or disclose information to each other.
In designated agency the broker in charge of an agency acts as the dual agent while two of his/her licensed agents act on behalf of each client. Although each side (both buyer and seller) have their own agent, both agents work for the same company so there still may be a conflict of interest.
Everyone wants to call themselves a buyer’s agent. Yet most buyer’s agents also list properties and spend most of their time selling homes, not representing buyers. They practice dual agency and are not exclusive buyer’s agents. If a buyer wants to see a home listed by their agent’s company, the buyer’s agent becomes a dual agent representing both the buyer and the seller. How can someone fully represent two opposing parties at the same time? They can’t.
Exclusive Buyer’s Agent:
An exclusive buyer’s agent does not take listings, which means that they never represent a seller in any transaction. In this way they are able to be 100% loyal to a buyer looking out for their sole interests.
Duties of an Agent:
Reasonable care and skill
To what degree an agent can perform these duties depends on the type of agency you decide upon and only an exclusive buyer’s agent can perform all of these duties 100% of the time.