Agents are bound by certain obligations which you are due as a client:
- Loyalty (act in the best interest of the client)
- Obedience of all lawful instructions
- Accountability (for all monies)
- Reasonable skill and care
- Declaration of all material facts
- Honesty and fairness to all
State laws clearly define the duties for each type of brokerage relationship. States have mandated agency disclosure forms and rules to provide meaningful and timely written disclosure and describe licensee's duties upon termination of a client relationship.
As you start communicating with an agent, ask for a clear explanation of your state's current agency regulations. Also request a copy of your agent's company's policy regarding agency so you will know where you stand on these important matters.
This agent works solely for and represents the seller. A seller's agent has no fiduciary responsibility to the buyer.
This agent works solely for and represents the buyer. A buyer's agent has no fiduciary responsibility to the seller even if the buyer's agent gets a portion of the commission paid by the seller.
One agent may represent both buyer and seller in a real estate transaction, but only if both parties consent. Buyer and seller must sign a dual agency disclosure statement that describes the duties and obligations of the dual agent. A dual agent may not disclose any confidential information that would place one party at an advantage over the other party, and may not advocate or negotiate on behalf of either of the two parties.
Most states permit dual agency relationships as long as the agency status is disclosed to both the sellers and the buyers in advance, and both parties agree to it. Undisclosed dual agency, which occurs if the buyer and seller have not been advised about or consented to dual agency, can be used as grounds to have a purchase agreement revoked and could permit the injured parties to seek recovery against the real estate agents.