The abbreviated guide to Real Estate Agency Rules

Real Estate agents are governed by the "Rules of Agency" when they enter into a professional relationship with you. They are required to disclose this to you and may ask you to sign a form stating that the rules of agency relationships were disclosed, called the Disclosure Regarding Real Estate Agency Relationships. Before you disclose confidential information to a real estate licensee regarding a real estate transaction, you should understand what type of agency relationship you have with that licensee.

The agency relationship consists of one person(the realtor) representing the interests of another(the buyer or seller). As part of this relationship, the agent owes the following precise duties to the person they are representing:

• Loyalty
• Confidentiality
• Disclosure
• Reasonable Care
• Diligence
• Obedience
• Accounting

There are several types of agency relationships that exist. Below you will find a brief description of each relationship. For more in-depth information, please request the brochure, "A Guide to Agency and Home Sales Services" by using the form on the Agency Explained page on this site.

Designated Seller's Agency

As the seller's agent, or listing agent, realtors represent the seller and have the following duties:

• promoting the best interests of the seller
• disclosing to the seller all facts that might affect or influence the seller's decision to accept an offer to purchase
• keeping confidential the seller's motivations for selling
• presenting all offers to the seller
• disclosing to the seller all information known to the seller's agent about the identity of all buyers and the willingness of those buyers to complete the sale or to offer a higher price

Designated Buyer's Agency

A designated buyer's agent acts solely on the behalf of the buyer. As a buyer's agent, a realtor has the following duties:

• promoting the best interests of the buyer
• disclosing to the buyer all facts that might affect or influence the buyer's decision to tender an offer to purchase
• keeping confidential the buyer's motivation for buying
• presenting all offers on behalf of the buyer
• disclosing to buyer all information known to the buyer's agent about the willingness of the seller to complete the sale or to accept a lower price

While the buyer's agent may be consulted and give his opinion about the property, it should be remembered that the agent is not an attorney, accountant, appraiser, property inspector, engineer or surveyor, and the buyer should seek the advice of those professionals when necessary.

Dual agency

Dual agency occurs when a designated agent has both a listing contract with the seller and a buyer agency with the buyer. A realtor can do both, but should do so only with the knowledge and written consent of both the seller and the buyer.

If this is agreed to by both parties, the realtor cannot reveal any knowledge s/he may have that would create an advantage for either party - such as the fact that the seller would accept less than list price, or that the buyer will pay more than offered. No confidential information about either party may be revealed to the other party.

Hopefully this helps to clear up the confusing world that is agency relationships.