Real Estate Agent

Agency can be a puzzling theme for both consumers and real estate practitioners. On the whole, there are three different agents. The seller’s agent or listing agent, the buyer’s agent and an agent who stand for both seller and buyer called a dual agent. The agent stands for the client or the Principal in transactions concerning third parties. California law require licensed real estate agents to present an agency disclosure form to all potential clients.

In real estate office or brokerage, the broker is the agent. The Principals (clients) can be sellers, buyers or both. Brokers frequently have other licensed salespeople or brokers working for them beneath contract, called associate licensees. However, the broker is forever the agent in the deal and is responsible for the actions of any associate licensees.

Dual agency is lawful in every state as long as it’s completely disclosed. The advantage of dual agency is a smoother transaction, since there is merely one agent acting as a mediator between the seller and buyer. The drawback of dual agency is that neither the seller or buyer is fully represented, nor the purchaser is usually not as well represented as the seller. The agent almost always has an on paper contract with the seller, while buyer broker agreement is still not widely used.

The dual agent has a clear conflict of interest, although knowledgeable real estate agents act in a specialized manner and do their best to serve up the interests and needs of both parties. The dual agent can’t reveal to the buyer that the seller is keen to sell the property for less than the catalog price, with no written consent. Also, the dual agent can’t reveal to the seller that the buyer is eager to pay more than the price offered, with no written consent. The dual agent has secret information about both parties which could notably affect the ultimate price and terms of sale.

The dual agent has an incentive to serve up the buyer, since they don’t get a commission if they don’t complete the sale. However, the dual agent might have a stronger incentive to serve the seller, since a higher price means a higher commission.

Enter the buyer’s agent. Also to build matters still more puzzling and confusing , there are three types of buyer’s agents. The single agency buyer’s agent, the exclusive buyer’s agent and the traditional buyer’s agent. An exclusive buyer’s agent works in an office which does not take any listings, and as a result will never find themselves in a potential dual agency situation. The single agency buyer’s agent will works in an office that seize listings, but has contracted not to present any of those listings to the buyer. The traditional buyer’s agent works in an office that obtains listings and has determined to present all properties to the buyer, yet if it set them in a dual agency situation.