What is Agency?

The Importance of Defining “Agency” When Buying or Selling Your Home

“Agency” is a term used by real estate professionals to describe the various legal roles real estate professionals (realtors, agents or licensees) may play as they assist you in buying or selling property.

You may find it a little easier to understand the responsibilities and duties of agency if you compare it to shopping at your favorite department store.

You enter a department store to make a purchase. A salesperson (who is an employee of the store) may approach you to offer assistance. Although she will be helping you with your purchase, she is working for the store owner. Or, in an alternate scenario, you may bring someone with you – for instance, a personal shopper or hired consultant – to assist you in the buying process. This person works directly for you.

The salesperson and the personal shopper have both been hired to assist you and each will be helpful, fair and honest. The difference is in whom they work for, who licenses their services – the store or you. As a home buyer in a real estate transaction, you have a choice.

Realtors Can Represent Either – or Both – Parties in the Transaction

In real estate transactions, agency specifies whether a realtor works for you (the buyer) directly, or whether he or she works for the other party (the seller) in the transaction. In other words, realtors can represent both sides of the transaction.

If you are buying a home, and have chosen Coldwell Banker Village Green Realty to represent you, the commission can still be paid for by the seller. Sometimes, a real estate agency may even designate realtors to assume both roles simultaneously under strictly defined responsibilities and roles.

It is very important for you to understand the legal responsibilities your realtor has to you and also to the other parties in your real estate transaction. Your realtor will explain his or her responsibilities to you, and ask you to sign an Agency Disclosure form.

In New York State, definitions of agency fall into four categories:

Seller’s representative (also known as a listing agent or seller’s agent)

A seller’s representative is hired by and represents the best interests of the seller. This relationship is normally created and defined by a real estate firm’s listing contract.

Buyer’s representative (also known as a buyer’s agent)

If you are a prospective homebuyer, you might hire this type of realtor to represent you in a real estate transaction and work in your best interest throughout the entire transaction. Homebuyers may pay the realtor directly through a previously negotiated fee; the buyer’s rep may also be paid by the seller or by a commission split with the real estate firm that handles the listing.

Disclosed dual agency

In a dual agency relationship, the real estate firm represents both the buyer and the seller during the same real estate transaction. In this type of agency, there is obviously a potential for conflicts of interest, so it’s vital that all involved parties (ie, both the buyer and the seller) give their informed consent in writing at the outset.

Designated agent

This brokerage practice allows the managing broker in a real estate firm to designate or assign some realtors to act as representatives (or designated agents) of the seller and others to represent the buyer. The managing broker is responsible for supervising both groups of realtors. Designated agents give their respective clients full representation, thus avoiding any potential conflicts of interest that may arise in dual agency.

We’ll Keep Your Best Interests In the Forefront

Depending on your needs and desires, Coldwell Banker Village Green realtors may serve you in any one of the above capacities. Please call or email today and we’ll be happy to help you determine how we can best assist you throughout the process of buying or selling your home.