Understanding Agency or 'Who works for who' in a real estate transaction.
It’s important to
understand what legal responsibilities your real estate salesperson has
to you and to other parties in the transaction. Ask your
salesperson to explain what type of agency relationship you have with
him or her and with the brokerage company.
Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
Sub-agent . A sub-agent owes the same fiduciary duties to the agent's principal as the agent does. Sub-agency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer’s representative or operating in a nonagency relationship, shows property to a buyer. In such a case, the sub-agent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a sub-agent 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 sub-agent. It is important that sub-agents fully explain their duties to buyers. In Illinois, we do not practice sub-agency.
Buyer's representative or buyers' agent. A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best 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 by a commission split with the listing broker.
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 the clients. Instead, dual agents owe limited
fiduciary duties. Because of the potential for conflicts of interest in
a dual-agency relationship, it's vital that all parties give their
informed consent. In many states and in Illinois, this
consent must be in writing. Disclosed dual agency, in which
both the buyer and the seller are told that the agent is representing
both of them, is legal in most states.Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
Non-agency relationship (called, among other things, a transaction broker or facilitator). Some states permit a real estate licensee to have a type of non-agency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a non-agency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
Need a buyers agent because you're thinking of purchasing a home? Article explaining that only.
So if you have a home to sell in the area, please give me a call. I would like to work with you and get you on your way to your new location.
Lyn
Sims at RE/MAX Suburban (847)230-7324Northwest Suburban Areas of Elk Grove Village, Schaumburg, Hoffman Estates, Roselle, Medinah, Itasca, Palatine, Bloomingdale, Carol Stream, Hanover Park, Streamwood, Elgin, South Elgin, St. Charles.
Who works for who in a real estate transaction? Understanding Agency©2008 Lyn Sims - RealEstateConsumerInfo.com All data and information provided on this blog is for informational purposes only. Lyn Sims makes no
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Lyn...that is one of the most mis understood things in Real Estate..Good Blog!
Bill: Just wanted to be sure the consumer understood the differences that are now available.