THE BUYER AGENCY AGREEMENT

A real estate company acting as a 'buyer's agent' must do what is best for the buyer. A written contract called a buyer agency agreement establishes buyer agency. It also explains services the company will provide, establishes a fee arrangement for the Realtor's services and specifies what obligations a buyer may have. Typically, buyers will be obligated to work exclusively with the company for a specific period of time. Confidences a buyer shares with the buyer's agent must be kept confidential. Although confidential information about the buyer cannot be disclosed, a seller working with a buyer's agent can expect to be treated fairly and honestly.

DUAL AGENCY 

Occasionally, a real estate company will be the agent of both the buyer and the seller. The buyer and seller must consent to this arrangement in their listing and buyer agency agreements. Under this 'dual agency' arrangement the company must do what is best for both the buyer and the seller. Since the company's loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a dual agency relationship be established in a written agency agreement. This agreement specifically describes the rights and duties of everyone involved and any limitations to those rights and duties.  

THE SELLER AGENCY RELATIONSHP

When a real estate company is a 'seller's agent' it must do what is in the best interest for the seller of a property. A written contract called a listing agreement establishes seller agency. It also explains services the company will provide, establishes a fee arrangement for the Realtor's services and specifies what obligations a seller may have.

A seller's agent must tell the seller anything known about a buyer. Example: if a seller's agent knows a buyer is willing to offer more for a property, that information must be shared with the seller. Confidences a seller shares with a seller's agent must be kept confidential from potential buyers and others. Although confidential information about the seller cannot be discussed, a buyer working with a seller's agent can expect fair and honest service from the seller's agent and disclosure of pertinent property information.

SO WHO'S WORKING FOR YOU?

It is important that you understand who the Realtor is working for. For example, both the seller and the buyer may have their own agent which means they each have a Realtor who is working for them ... or, some buyers choose to contact the seller's agent directly. Under this arrangement the Realtor is working for the seller, and must do what is best for the seller, but may provide many valuable services to the buyer.   

CODE OF ETHICS 

Realtors believe it is important that the people they work with understand their agency relationship. The Code requires Realtors to disclose in writing the nature of the services they are providing, and encourages Realtors to obtain written acknowledgement of that disclosure. The Code also requires Realtors to enter into a written agency agreement with any sellers or buyers they are representing.

Realtors are governed by the legal concept of 'agency'. An agent is legally obligated to look after the best interest of the person he or she is working for. The agent must be loyal to that person. A real estate company may be your agent, if you have clearly established an agency relationship with that Realtor. But often, you may assume such an obligation exists when it does not. Realtors believe it is important that the people they work with understand when an agency relationship exists and when it does not... and, understand what it means.