As a real estate agent, one of your most important roles is clearly explaining the concept of buyer and seller agency to your clients. Understanding these concepts is crucial for clients to make informed decisions and ensure their best interests are represented throughout the buying or selling process.

When hiring a real estate agent, clients expect them to work in their best interests. However, there are instances when an agent’s loyalties are split, making it essential for clients to understand how agents work and how they get paid before signing any agreements.

Buyer Agency

A buyer’s agent represents the buyer exclusively. This means that the agent works solely with that buyer for that specific transaction, providing 100 percent loyalty and confidentiality during negotiations. It’s important for clients to closely review the buyer agency agreement and the exclusivity clause in the contract with their agent.

Seller Agency

Similarly, an exclusive seller or listing agent represents the seller’s best interest in the home sale. Like the buyer’s agent, the listing agent provides protection to the seller during negotiations. Clients should pay close attention to the exclusivity clause in their contract with the agent. Until a listing agreement is signed, clients should be careful not to disclose confidential information.

Sub-Agency

Sub-agencies can be complex. For example, if a client sees a home on a real estate portal and contacts the seller’s agent, they should remember that the agent works for the seller, not them. Clients should avoid disclosing any information that might be helpful in negotiations, such as their financial situation or reasons for relocating. However, the agent is ethically bound to provide any material facts, such as a leaky roof, to a potential buyer.

Dual Agency

A dual agency, where an agent represents both the buyer and the seller, is allowed in some states and by some firms. However, it can be seen as a conflict of interest. In dual-agency situations, the agent acts as a referee between the parties and must disclose in writing that they are acting as a dual agent.

As a real estate agent, it’s crucial to clearly explain the concepts of buyer and seller agency to your clients. By helping them understand these concepts, you can ensure that they make informed decisions and that their best interests are represented throughout the buying or selling process.

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