Agency relationship: Traditionally, the
Real Estate Broker provides a conventional
full-service, commission-based brokerage relationship under a
signed listing agreement with a seller or "buyer representation" agreement
with a buyer, thus creating under common law in most states an agency
relationship with fiduciary obligations. The seller or buyer is then a
client of the broker. Some states also have statutes which define and
control the nature of the representation.
Agency relationships in residential real estate transactions involve the
legal representation by a real estate broker (on behalf of a real estate
company) of the principal, whether that person or persons is a buyer or a
seller. The broker (and his/her licensed real estate agents) then becomes
the agent of the principal. Non-agency relationship: where no written agreement nor fiduciary
relationship exists, a real estate broker (and his agents) works with a
principal who is then known as the broker’s customer. When a buyer, who
has not entered into a Buyer Agency agreement with the broker and buys a
property, then that broker functions as the sub-agent of the seller’s
broker. When a seller chooses to work with a transaction broker, there is
no agency relationship created.
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Also See:
Real
Estate Index
Keyword Category
Index
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