What Is a Buyers Agent?

If you are a home buyer or someone selling your home you need to understand the legal responsibilities your real estate professional has to you and to other parties in the real estate transaction. Be sure your real estate agent explains what type of agency relationship you have with their real estate company.

Buyer’s Representative (Buyers Broker, Buyers Agent) – A real estate licensee hired by a prospective buyer to exclusively represent them in the purchase of real property. The real estate licensee has a fiduciary duty to the buyer. They ALWAYS will represent the buyer “exclusively” and negotiate the best price and terms for the buyer. This is almost always a FREE service to the buyer, as commissions are paid by the seller of the real property. This agency relationship is usually created by a “Buyer-Broker Exclusive Employment Agreement.

Seller’s Representative (Listing Agent, Sellers Agent) – A real estate licensee hired by a prospective seller to exclusively represent them in the sale of real property. The real estate licensee has a fiduciary duty to the seller. They ALWAYS will represent the seller “exclusively” and negotiate the best price and terms for the seller. This agency relationship is created by a Listing Contract.

Sub-Agency – This type of agency used to be commonplace but is gradually phasing out. A subagent owes an equal fiduciary duty to the buyer and seller. The sub-agent for all intent and purposes represents a buyer who is a buyer-customer and not a buyer-client, because of the fiduciary duty to the seller and listing broker. In other words the agent cannot represent the buyer if it would be damaging to the seller or sellers broker.

Disclosed Dual Agent – An example would be two agents that work for ABC Realty. One of the real estate agents is the listing agent and represents the seller. The other real estate agent represents the buyer. Since both agents are licensed with the same Brokerage, dual agency is created automatically. Another example is where one agent represents both the buyer and seller. There are limited fiduciary duties between the agents, the buyers, and the sellers. Although legal in real estate, this type of agency has severe legal ramifications if not disclosed properly. All parties to the transaction must give their consent in writing.

Designated Agent (Appointed Agent) – Only a few States offer this type of agency. The Managing Broker or Designated Broker for the company “designate” or “assign” which licensee will represent the buyer and which licensee will represent the seller. This eliminates the conflict of interest with Disclosed Dual Agency. The Designated Agent must provide full representation to their client. However, close monitoring and supervising of the licensees is essential and required by the broker.

Non-Agency Relationship (Transaction broker, Facilitator) – This type of agency is only allowed in some states. The buyer and seller only have a buyer-customer or seller-customer relationship with their real estate agent. The licensee has limited representation and fiduciary duties to the “customer”.