It is important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transaction. Ask what type of agency relationship your agent has with you:
Seller’s representative (also known as a listing agent or seller’s agent): A seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
Buyer’s representative (also known as a buyer’s agent): A buyer’s agent is hired by prospective buyers to represent them in a real estate transaction. The buyer’s agent works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s agent may be paid by the seller or through a commission split with the seller’s agent (which is the most common practice).
Disclosed dual agent: Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states.
The Arizona Association of REALTORS® “Real Estate Agency Disclosure and Election Form” is included in the sample forms section in the back of this booklet.
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