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The common thought among real estate agents, is that the more you tell them, the
better they can negotiate on your behalf. However, the degree of trust you have with
an agent may depend upon their legal obligation. Agents working for buyers have 3
possible options: They can represent the buyer exclusively or "single agency", or
represent the seller exclusively, sub-agency, or represent both the buyer and
seller in a dual-agency role. Some states mandate agents to disclose all possible
agency relationships before they enter into a residential real estate transaction.
The following is a summary of the three basic relationship types:
A) A buyer can hire his or her own agent who will represent the buyer's interests
exclusively. Sometimes a buyer's agent must be paid out of the buyer's own pocket
but the buyer can trust them with financial information, knowing it will not be
transmitted to the other broker and ultimately to the seller. More often the seller
pays both the selling broker and the buyer's broker.
B) Traditional relationships are where a real estate agent and broker have a
fiduciary relationship to the seller. Be aware that the seller pays the commission
of both brokers, not just the one who lists and shows the property, but also to
the sub-broker, who brings the ready, willing and able buyer to the table. It most
cases you will have 2 broker's dividing the commission.
C) Dual agency exists if 2 agents working for the same broker represent the buyer
and seller in the same transaction. A conflict of interest is created if the
listing agent has advance knowledge of another buyer's offer. Therefore, the law
claims that a dual agent shall not disclose to the buyer that the seller will
accept less than the list price, or disclose to the seller that the buyer will
pay more than the offer price, without express written consent.
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