Agency – in real estate


I write some version of this every year in the late winter because this is when people start getting serious about buying a home. Sometimes home buyers end up in open houses or in a model home talking with an agent who represents the seller and who has a duty to the seller and a contractual obligation and is the sellers agent.

There are five kinds of agency relationships in real estate recognized by the state of Minnesota:

  1. Seller’s Agent: representing and acting for the seller only. May be a listing agent, or any REALTOR® licensed to the listing broker, or a selling subagent.
  2. Subagent: a broker or salesperson who is working with a buyer, but represents the seller.
  3. Buyer’s Agent: representing and acting for the buyer only. As with a listing contract with sellers, an agreement for buyer representation must be in writing.
  4. Dual Agent: one licensee representing both the seller and the buyer as clients in one transaction, or two agents licensed to the same broker, one of whom represents the seller and one of whom represents the buyer in one transaction. This requires  full disclosure and informed consent of both parties. Dual agents have a limited role, must not advocate or negotiate for either party, and must not act to the detriment of either party.
  5. Facilitator: a real estate licensee who works for a buyer, a seller or both in a transaction but does not represent either in a fiduciary capacity as a Buyer’s Broker, Seller’s Broker or Dual Agent. Facilitators may perform services for consumers, but do not represent them. Facilitators are bound by license law and common law, but owe only the fiduciary duty of confidentiality unless other fiduciary duties are agreed to between licensee and consumer.

Buyers and sellers both like to ask me if I am a buyers agent, or a sellers agent.  Some of these conversations have revealed some mis-information about dual agency.   Dual agency happens only when an agent, or the agents broker, or more than one of the brokers agents  are working on behalf of that broker and representing both parties in the same transaction.

I am both a buyers agent and a sellers agent.   I encounter situations where I am asked to play both roles in a single transaction.   I have represented both parties in a transaction, but I prefer not to.   Dual agency is a bit different in than buyers agency or sellers agency in that the agent can not advocate or negotiate for either party.  Takes the fun out of it for me, and I still believe that both parties are better off if they each have their own agent.

What most buyers and sellers do not understand is that if there are two agents and one is working with the seller and the other the buyer but those agents have the same broker it is still dual agency.  For example lets say Sally’s house is listed with Sam from XYZ realty and John is working with Jean as his buyers agent and Jean is also with XYZ Realty.  If these agents have the same broker even if they are in different offices they are dual agents in this transaction and can not advocate for either party.

If I were choosing an agent I would not consider it an advantage to work with an agent that is not representing both parties in the transaction.    I would consider it an advantage to have my own agent representing my best interests instead of an agent who is operating in the dual agency role and representing both parties.  Like it says above:  

“Dual agents have a limited role, must not advocate or negotiate for either party, and must not act to the detriment of either party.”

Buyers who go from open house to open house or the agent listed on each sign, to see each home,  run the risk of working with an agent in a dual role.  Get your own agent. There is still a myth out there that agents can only show their own listings.  We can show any home listed in the MLS, this is called “broker reciprocity“.  It helps sellers because all agents are working to sell their home and it helps buyers because they can work with any agent from any company to buy any piece of real estate.

Also see:

Dual Agency 

Agency and the open house

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3 Replies to “Agency – in real estate”

  1. Good information Teresa. I’m sure most people understand this.

    1. I mean “don’t” understand that. Where’s the edit button!

      1. Teresa Boardman says:

        That is why I write about it once a year or so. As real estate agents we do everything we can to confuse consumers who really just want to buy a home or sell one.

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