In real estate buying and selling, there are different types of brokers. A seller’s agent works for the real estate company that lists and markets the property for the sellers and exclusively represents the sellers. That means that the seller’s agent may assist the buyer in purchasing the property, but his or her duty of loyalty is only to the sellers. This is an important fact that the agent should not hide from the buyer. Non-disclosure could result in litigation as part of real estate professional liability concerns.

What is a cooperating agent?

A cooperating agent works for a real estate company different from the company for which the seller’s agent works. The cooperating agent may assist a buyer in purchasing a property, but again, his or her duty of loyalty is only to the sellers.

There are agents who represent the buyer

When a person goes to a real estate agent for assistance in finding a home to purchase, the agent is presumed to be representing the buyer and is free to show the buyer properties that are not necessarily listed by the agent’s real estate company. That agent assists the buyer in evaluating properties and preparing offers, and negotiates in the best interests of the buyer. The agent’s fee is paid according to the written agreement between the agent and the buyer.

Buyers and sellers may negotiate with a dual agent

The possibility of dual agency arises when the buyer’s agent and the seller’s agent both work for the same real estate company, and the buyer is interested in property listed by that company. Dual agents do not act exclusively in the interests of either the seller or buyer, and therefore cannot give undivided loyalty to either party.

There may be a conflict of interest because the interests of the seller and buyer may be adverse. If both seller and buyer agree to dual agency by signing a Consent For Dual Agency form, then the “dual agent” (the broker or the broker’s designee) will assign one agent to represent the seller and another agent to represent the buyer, advising their clients as to price and negotiation strategy, provided the clients have both consented to be represented by dual agency.

In any scenario, the agent must disclose all facts about the property, make sure documents list everything properly, and act in good faith. Real estate professional liability insurance will aid agents who are sued by buyers who feel they were given false information, or discover the property was not “as advertised.”

 

photo credit: okchomeseller cc
Different Types of Brokers and Real Estate Professional Liability Issues