Agency Relationships in Real Estate: A Complete Guide
Agency is one of the most heavily tested topics on the real estate exam. Understanding these relationships is crucial for both the exam and your career.
What is Agency?
Agency is a legal relationship where one person (the agent) represents another person (the principal) in dealings with third parties.
Types of Agency Relationships
Seller's Agent (Listing Agent)
- Represents the seller's interests
- Owes fiduciary duties to the seller
- Must disclose material facts about the property
Buyer's Agent
- Represents the buyer's interests
- Helps buyer find suitable properties
- Negotiates on buyer's behalf
Fiduciary Duties (OLD CAR)
Agents owe their clients these duties:
- Obedience - Follow lawful instructions
- Loyalty - Put client's interests first
- Disclosure - Reveal material facts
- Confidentiality - Protect private information
- Accounting - Handle money properly
- Reasonable Care - Act competently