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Agency Disclosure
What it is and what it means to you:
An agent is someone you appoint to act on your behalf. In so doing, the agent then becomes bound by certain fiduciary duties which include obedience, loyalty, disclosure, confidentiality, accountability, and reasonable care and diligence. An agency relationship can be created by a desire to be represented and a consent to represent; however, it is more often created as a result of a listing agreement or a buyer representation agreement.
There are generally four types of agency relationships. They are:
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Sellers Agent - |
works only for the seller |
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Buyers Agent - |
works only for the buyer |
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Disclosed Dual Agent - |
works for both the buyer and seller |
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Transaction Broker - |
works with buyer or seller or both without representing anyone. (does not promote interests of one party over the other.) |
Seller Agency:
A seller's agent works only for the seller and has legal obligations, called fiduciary duties, to the seller. These include reasonable care, undivided loyalty, confidentiality and full disclosure. Seller's agents include all persons licensed with the brokerage firm which has been authorized through a listing agreement to work as the seller agent.
Buyer Agency:
The buyer agency relationship is usually created when a buyer and an agent agree between themselves to enter such a relationship. In this case, the agent works in the buyer's best interest and owes fiduciary duties to the buyer.
Disclosed Dual Agency:
A disclosed dual agent works for both the buyer and seller. To work as a dual agent, a firm must first obtain the informed written consent of the buyer and the seller. Therefore, before acting as a disclosed dual agent, brokerage firms must make written disclosure to both parties. Disclosed dual agency is most likely to occur when a licensee with a real estate firm working as a buyer's agent shows the buyer properties owned by sellers for whom that firm is also working as a seller's agent.
Transaction Broker:
The New Jersey real estate licensing law does not require licensees to work in the capacity of an "agent" when providing brokerage services. A transaction broker works with a buyer or a seller or both in the sales transaction without representing anyone. A transaction broker does not promote the interests of one party over those of the other party to the transaction.
