Buying or selling a house can be an emotional whirlwind. However, this process is first and foremost a legal transaction. Because of this, it is crucial to select real estate representation that will protect your interests in the transaction. In this blog post, we’ve provided an overview of the most common types of agency relationships to consider when buying or selling your home.

In the real estate industry there are essentially two main types of representation:

Buyer Representation

If you are buying a home and you enter into an agreement with an agent and their firm, that agent is legally obligated to represent you and your financial interests as a buyer.

Seller Representation

If you are selling a home and you enter into an agreement with an agent and their firm, that agent is legally obligated to represent you and your financial interests as a seller.

This representation becomes more nuanced within the different types of agency relationships:

Buyer’s Agency

A buyer’s agent represents only you (as the buyer) and your interests in the legal transaction. The buyer’s agent owes you a fiduciary duty throughout this process.

Seller’s Agency

A seller’s agent represents only you (as the seller) and your interests in the legal transaction. The buyer’s agent owes you a fiduciary duty throughout this process.

Subagency

In this relationship, a subagent of the seller represents the buyer in the legal transaction. A subagent owes the buyer honesty but ultimately acts in the interests of the seller and the seller’s agent.

Disclosed Dual Agency

In a disclosed dual agency relationship, one agent from one firm represents both parties and facilitates the entire legal transaction. The agent represents the buyer and seller equally and owes confidentiality to both parties. Because of this, the agent may not be able to fully represent your interests, and his or her fiduciary duties are split.

Designated Agency

In a designated agency relationship, one firm facilitates the entire legal transaction for both parties. However, two agents from that firm each represent the buyer and the seller separately throughout the process. The firm owes fiduciary duty and confidentiality to both parties equally.

With these different types of relationships in mind, you can make an informed choice and secure the real estate representation that will best serve your interests. It’s important to note that our list has not covered every type of representation and that agency law varies from state to state. When in doubt, ask your agent and firm to explain exactly what they will and will not do for you.

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