A REALTOR® is a Licensed Real Estate Agent who is a part of an association affiliated with the National Association of REALTORS®. REALTORS® subscribe to a strict code of ethics that were developed long before many government laws and restrictions were put in order. This code of ethics governs the conduct of the REALTOR®.
Real Estate Agency is the relationship that you have with your REALTOR®.
When these agency relationships are established your REALTOR® has a set of Fiduciary Duties.
What are these different types of agency and what do they mean for you?
Seller's Agent - A seller's agent works solely on behalf of the seller. Sub-Agents of the seller's agent also work on behalf of the seller owing the seller fiduciary duty as well. These agents are responsible for disclosing information about the buyer to the seller and are obligated to remain quiet on information provided by the seller unless the agent has been given prior permission. The Seller's Agent should work with the seller to determine the best price for their home, give them pointers to show their home in its best light, market their home, ensure that the buyers presenting offers are prepared/able to complete transaction, analyze and negotiate offers and attend closing to ensure the smoothest process possible. This Agency is usually created through a Listing Agreement.
Buyer's Agent - In this form of agency the agent works solely on behalf of the buyer (as I am sure you could have guessed). There is a lot to be benefited from obtaining a Buyer's Agent when you begin your home search. A Buyer's Agent will set up a home search to meet your needs and wants. Your agent will also schedule tours of the homes that you are interested in and be present through those tours. Once you have selected a home you would like to purchase your agent will do a Market Analysis to assist you in making a strong offer and assist you through any further negotiation with the seller. A Buyer's Agent can also point you in the right direction for a home inspection and assist with any negotiations that may need to be made at that point. These are a just a few reasons you may want to select a Buyer's Agent when looking for a home. The best part is their commission is typically paid by the seller.
Dual Agents - These agents represent both the seller and the buyer but only with the consent of each party in writing.
Transaction Coordinator - A Transaction Coordinator works in a non-agency capacity while working with buyers or sellers. No traditional agency-related services are involved. To put it simply, a Transaction Coordinator will merely draft up documents according to terms that a seller and buyer have already agreed upon.
Designated Agency - Designated Agency is a Brokerage practice that designates an agent to represent the buyer and a separate agent to represent the seller. Each agent owes their client fiduciary duties. Designated Agency FAQ
Agency Disclosure is required by the state of Michigan, meaning that buyers and sellers must be made aware of available agency relationships and the duties that are owed under each one. This law also requires that when a Real Estate Agent is acting in capacity of an Agency Agreement they make known which party they represent.
Before you disclose any confidential information to a Real Estate Agent regarding a transaction you should understand the type of relationship you have with that Agent.
