Understanding Agency Relationships

Damion — Tue, 05 May 2009 18:06:06 +0000

You have been driving around, looking at homes, calling every agent you see a sign for, finally write an offer on a house and you get to the agency disclosure and find out that the agent you have been friendly with for the past week - the one that knows every intimate detail of your financing, and the one that KNOWS you are willing to pay top-dollar for that new house - is not your agent! The above scenario happens a LOT in our industry and while agency laws vary from state to state, the major gist of all of them is that the agent with the listing represents the seller first and foremost. Sure, you may run into a dual agency or implied agency relationship with a Realtor® that you deal with, but it is important to get the details of your representation up front as it could save you thousands of dollars and a lot of headaches. There are many types of agency relationships but we are going to focus only on the ones that are relevant to Mississippi since that is the target audience for this post. There are Ultimately 4 different ways you can be represented in a real estate transaction in Mississippi, as a Seller’s Agent, Buyer’s Agent, in a Dual Agency, or as a Customer. Seller’s Agent: A seller’s agent represents the best interest of the seller only and it is his duty to procure the best price and terms for the seller. A seller’s agent owes the seller, and only the seller, the fiduciary responsibilities of loyalty, confidentiality, obedience, disclosure, full accounting and duty to use skill, care and diligence. To the buyer in a transaction, the seller’s agent must exercise a duty of honesty and fair dealing as well as disclosure of all known facts to the buyer or buyer’s agent which materially affect the value of a property which are not known to, or readily observable by the parties in the transaction. Buyer’s Agent: A buyer’s agent represents the best interest and terms of the buyer only. The duties of a buyer’s agent are the same fiduciary responsibilities of loyalty, confidentiality, obedience, disclosure, full accounting, and the duty to use skill, care and diligence. The buyer’s agent still owes the seller a duty of fair dealing. Dual Agent: Dual agency relationships must be fully disclosed to all parties in the transaction. While all agency relationships should be fully disclosed, dual agency is kind of like an attorney representing the husband and wife in a divorce case. Each party has differing wants, but the dual agent walks a fine line between the two. A dual agent should never represent the interest of one party to the extent it would create a detriment to the other. Customer: A customer in a real estate transaction basically has no representation and the agent can only ask you what you want in the terms without giving advice. The duties of fair dealing must still be there but ultimately their duties and responsibilities lie elsewhere. A customer is ...

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Understanding Agency Relationships