Real estate law is a very complex field of law. When you’re either buying or selling a house, make sure you work with a reliable real estate agent who will meet your needs and represent your general as well as legal interests.
One of the first things you should ask your realtor is about their agency relationship is in regards to your transaction. The following is a list of the most common agency relationships today as well of some of the legality that goes along with it.
Also known as a listing agent or seller’s agent. Their duty is to represent the seller exclusively in the sale of their property. A real estate agent has what is known as fiduciary duty. Fiduciary duty is encompassed by many things but it essentially boils down to your agent doing their absolute best to follow your instructions and get you the best deal possible.
A.k.a buyer’s agent or buyer’s broker. Their job is to exclusively represent the buyer of the property. They also have a fiduciary duty to the buyer and will handle negotiations on their behalf. This is usually a service they offer free of charge to their buyer as they are paid through the commissions by the seller.
This type of agent holds a fiduciary duty to both the buyer and a seller in a real estate transaction. It is worth noting that this type of practice is now uncommon and is getting more so. Because of their fiduciary duty to both parties, these agents tend to favor the seller over the buyer since they see the buyer as a buyer-customer rather than a buyer-client.
This is when an agent represents both the buyer and seller in a real estate transaction. Fiduciary duties are limited in these agreements. This kind of relationship also happens automatically if, say, you have a buyer’s agent work for the same company or firm as the seller’s agent in that transaction.
When proceeding with the transaction in this type of setup, the situation must be made clear to the buyer and the seller and they must also provide their consent in writing.
An uncommon type of agency only allowed a few states, this is when the designated broker for the company assigns which licensee will represent the seller and which licensee will represent the buyer. Your agent give you full representation but will also need to be closely monitored by the broker.
Just like a designated agent, this kind of agency is only legal in a few states. This is when the buyer and the seller have a buyer-customer or seller-customer relationship with the agent. This also leads to the licensee not being able to fully represent their clients along with limited fiduciary duties. Real property transaction in areas like NYC would never be able to work in such a manner.
This is a complicated and confusing setup and is the cause of confusion for several people. You will want to keep things simple and have somebody who will work for you exclusively and guide you properly when you are making what is likely the biggest financial decision of your life.
In conclusion, one of the most vital points to remember when involved in a real estate transaction is to avoid any conflict of interest. Make sure your agent as well as your real estate attorney is on your side and your side only.
Robert Aronov & Associates, PC 88-02 136th St, Jamaica, NY 11418 (718) 206-1555 https://realestatelawyernys.com