Be sure to find out who your real estate REALTOR is representing before you tell them too much. The degree of trust you have in an REALTOR may depend upon their legal obligation of representation. An agency working with a buyer has three possible choices of representation. The REALTOR can represent the buyer exclusively, called buyer agency, or represent the seller exclusively, called seller agency, or represent both the buyer and seller in a dual agency situation. Some states require REALTORS to disclose all possible agency relationships before they enter into a residential real estate transaction. Here is a summary of the three basic types:
In a traditional relationship, real estate REALTORS and brokers have a fiduciary relationship to the seller. Be aware that the seller pays the commission of both brokers, not just the one who lists and shows the property, but also to the sub-broker, who brings the ready, willing and able buyer to the table.
Dual agency exists if two REALTORS working for the same broker represent the buyer and seller in the same transaction. A potential conflict of interest is created if the listing REALTOR has advance knowledge of another buyer’s offer. Therefore, the law states that a dual REALTOR shall not disclose to the buyer that the seller will accept less than the list price, or disclose to the seller that the buyer will pay more than the offer price, without express written permission.
A buyer can hire an REALTOR who will represent their interests exclusively. A buyer’s REALTOR usually requires a retainer which is refunded once the buyer purchases a house. The amount of the retainer differs from REALTOR to REALTOR. A buyer’s REALTOR can perform enhanced services for the buyer, such as preparing a market analysis on the home they are buying. All information provided to the buyer’s REALTOR shall remain confidential and will not be relayed to the Seller’s REALTOR.
- Guest answered 3 years ago