So real estate and agency within the industry can be somewhat complicated to navigate. Furthermore, having a better understanding of real estate agency can boost seller or buyer confidence throughout a home purchase process. If you’re not sure about the various types of agency, what a listing agent does or if one even needs a selling agent, read on.
A better understanding of agency can preemptively halt any chaos which can ensue. In our opinion, it’s critical that your real estate professional take you through hills and valley of agency – listing, selling and so on. Here’s a primer on agency, where we’ll likewise address when your listing agent is also a selling agent.
In Pennsylvania, the listing agent (the agent who lists and is actively attempting to find a qualified buyer for a seller’s property) is the agent who works in the best interests of the owner/landlord. Did you know this agent must “safeguard his principal’s confidence and secrets. A real estate broker, therefore, must keep confidential any information that might weaken his principal’s bargaining position if it were revealed” except in the case where material defects to the property exist?
The listing agent…
- Represents the seller
- Must be loyal to the seller
- Must uphold confidentially
- Must make a good faith effort to find a purchaser/tenant
- Must disclosure their role (as a listing agent and if they’re also acting as a designated or dual agent)
There are at least two sides to each real estate transaction: Buyer and seller or tenant and landlord. We’ve discussed the importance of a listing agent, but obviously the other side is as critical to any deal. A selling agent (aka a buyer’s agent) similarly has fiduciary responsibilities to the purchaser/tenant much like the listing agent has to the owner/landlord.
The selling agent…
- Represents the buyer
- Must be loyal to the buyer
- Must uphold confidentially
- Must make a good faith effort to find a property for purchaser/tenant
- Must disclosure their role (as a buyer’s agent and if they’re also acting as a designated or dual agent)
Did you know that a buyer doesn’t need a selling agent? Is it advisable? No, but like the migration of the monarch butterfly it does happen from time to time. In most cases, the seller (via commission paid to the listing company) pays the both the listing agency and the buyer agency.
Subsequently when your listing agent is also a selling agent this is known as dual agency. This concept of dual agency may sound absurd to some buyers and sellers alike. How could a listing agent, who is looking out for the best interests of his/her seller, also act in the best interests of a buyer? It’s a very good question to think about in addition to having an in depth conversation with your real estate professional. Dual agency can be undertaken – your listing agent can be a selling agent for your property – when consent is given in writing by both seller and buyer. It’s done often and ethically.
As a seller or buyer, you might conclude that dual agency just isn’t for you, and that’s okay too. It’s a conversation you need to have with your REALTOR®. There are alternatives to dual agency, where a brokerage, if it practices designated agency for instance, can assign a seller or buyer to another real estate agent within the brokerage.
There’s so much more to the “agency story” in Pennsylvania as well as other states throughout the nation. You can gain more information about these agency relationships by referencing Pennsylvania Association of REALTORS® Consumer Notice and by again, bouncing questions off your real estate professional. We’re here to help!