Whether you are a buyer or a seller, it is crucial to understand who represents whom in a real estate transaction. In most states, an agent can represent either seller or buyer as a single agent, or both buyer and seller (with their written consent) as a dual agent. In a few states, an agent can act as a transaction broker without representing either buyer or seller. Nearly all states have agency disclosure laws that require your signed consent to representation. Contact your local office of real estate regulation to learn more about how agency works in your state.
The agency relationship is simpler for sellers than for buyers. A seller's agent is the listing agent with whom you sign a contract for a specified period to sell your home and to represent you in the sale. But if you are a buyer, your agent's status is not always as clear. You may, for example, choose to work with a buyer's agent, who agrees in writing to represent only you. Otherwise, "your" agent may legally be a subagent of the seller. Some states now presume that an agent who works with a buyer is the buyer's agent. Clarify this distinction with your agent before you divulge important information.
Agent's typical responsibilities: Select and show suitable properties; present offer; negotiate terms on behalf of buyer; assist with escrow requirements. Market home under terms of listing contract; negotiate terms on behalf of seller; assist with escrow requirements. Market home for seller; qualify and show home to potential buyers; negotiate terms on behalf of buyer and seller; assist with escrow requirements.
Cautions: If you sign a contract to work with a buyer's agent, be sure it specifies an expiration date and fee. Long listing contracts (more than 90 days) can backfire if the market goes sour. Most listing contracts span 60-90 days. Talk to prospective agents beforehand about alternative sales strategies as the listing period progresses. Dual agency arrangements must be disclosed and agreed to by both parties. Dual agency is prohibited in some states. Consult a lawyer if you have questions about the purchase contract or negotiations.
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