So, you are thinking of making a move. Whether buying or selling, your Realtor will explain representation available to you in your state. In the majority of situations, a Realtor typically represents either the seller or the buyer. However, many buyers do not understand that the seller’s agent has a fiduciary duty or a duty of loyalty to the seller. While agency laws differ from state to state they have the same general principles:
Seller’s Agent: A seller’s agent works for the real estate company that lists and markets the property for the seller, exclusively representing the interest of the seller. Also known as a listing agent, the seller’s agent has a fiduciary duty to the seller and must negotiate the best price and terms for their client. This means that the agent owes the seller undivided loyalty, reasonable care, disclosure, obedience, confidentiality and accountability. That being said a seller’s agent does have the responsibility to act fairly and honestly with all parties including an unrepresented buyer.
Buyer’s Agent: A buyer agent does just that… represents the buyer throughout the sale and owes those same responsibilities to their clients while trying to get them the best price and terms with their purchase. A buyer’s agent will assist the buyer in evaluating various properties, provide comparative properties to assess pricing, prepare offers, and negotiate in the best interest of the buyer. The importance of a buyer’s agent, whether you are a first time home buyer or experienced, is crucial to ensuring a successful outcome. Buyer’s agency goes far beyond writing an offer! A buyer’s agent will negotiate issues that may arise during an inspection, be the liaison between you and the sellers, in addition to your attorneys, and will navigate you through many types of “turbulence” that could arise during your sale process. You need someone on your side, representing you and your best interests throughout your home purchase.
Dual Agency: In some cases an agent will assume the role of a dual agent (representing both the seller and the buyer). Dual agency occurs when the buyer’s agent and the seller’s agent are the same person and is only allowed with expressed written consent by both parties. Dual agents do not act exclusively in the interests of either the seller or buyer but must remain neutral. Dual agents cannot offer undivided loyalty to either party and act more as a conduit for offers and passing along information while still owing each side confidentiality of material information. A conflict of interest can arise because the interests of the seller and buyer may be different. A buyer and seller must agree to dual agency. Some real estate brokerages do not practice Dual Agency in Massachusetts.
Non-agent Facilitator: In some circumstances an agent will work as a facilitator assisting the buyer and seller in reaching an agreement but not representing either side in the transaction. The facilitator owes the buyer and seller a duty to present each property honestly and accurately but has no duty to keep any information received from the buyer or seller confidential.
Disclaimer: If you are reading this outside of Massachusetts, check the agency laws specific to your state.