Why do I need Representation???
June 13th, 2016
When you work with an agent in a real estate transaction, you’re either a client or acustomer of that agent. There is a difference, and it’s important.
A client has a brokerage relationship with a Realtor®: The client has signed a contract and is legally represented by that Realtor® and the Realtor®’s brokerage. Every other person who’s party to that transaction is considered a customer of that Realtor®. The Realtor®’s primary fiduciary responsibility is to the client.
In real estate transactions, there are two main types of representation:
- Seller representation: If you are selling a property and enter a brokerage agreement with a Realtor®, that Realtor® and their firm become your representative during that specific transaction. They are legally obligated to represent you and your financial interests as a seller.
- Buyer representation: If you are buying a property and enter a brokerage agreement with a Realtor®, that Realtor® and their firm become your representative during that specific transaction. They are legally obligated to represent you and your financial interests as a buyer.
Representation is straightforward if the buyer and seller agents are affiliated with different companies. However, when the agents on opposite sides of the transaction work for the same brokerage, representation and agency become more nuanced and complex.
These are the four most common types of agency and what they mean:
- Seller agency: A Realtor® from Brokerage A represents the seller in a transaction. This Realtor® looks out for the best interest of the seller in the transaction, and owes the buyer honesty and any material facts about the listed property that are needed to make an educated decision.
- Buyer agency: A Realtor® from Brokerage B represents the buyer in a transaction. This Realtor® looks out for the best interest of the buyer in the transaction, and owes the seller honesty and any material facts that are needed to make an educated decision.
- Intermediary without appointment: One Realtor® from Brokerage A represents both the buyer and the seller in a transaction. This Realtor® represents the buyer and seller equally and owes confidentiality to both parties. Realtors® in a Intermediary without appointment relationship facilitate the entire transaction and may not provide full advice to either party due to confidentiality.
- Intermediary with appoinment: Real estate Brokerage A represents both the buyer and seller, with one Realtor® from Brokerage A representing the seller and a separate Realtor® from Brokerage A representing the buyer. The brokerage represents the buyer and seller equally, owes confidentiality to all parties and may do nothing to the detriment of either the buyer or the seller.
For more information or questions regarding this article please visit my Website at www.micheleleewhitley.com to sign up for a complementary consultation. This is a free no obligation consultation where you can get all your questions answered about buying or selling a house.
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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®