by Max Malychev, Legacy Real Estate Agent
When you work with a Realtor® in a transaction, they have certain legal duties (fiduciary duties) that they must fulfill. It’s important to understand the concept of Agency to avoid being misrepresented. In a standard Agency Relationship, one Realtor® represents you while another represents the other party. Your agent owes you duties such as full disclosure, loyalty, confidentiality, reasonable care and skill, obedience, and full accounting.
However, in a Dual Agency Relationship where one agent represents both the seller and the buyer, conflicts of interest arise. It’s difficult for a Realtor® to represent one party without compromising their loyalty to the other. Dual agency requires the consent of all parties involved, and the Realtor® becomes an impartial liaison, disclosing certain information while keeping other information confidential.
What many people don’t realize is that an agency relationship can be created without signing any documents. For example, engaging in a conversation with a Realtor® at an open house or through a phone call can imply an agency relationship. However, in most cases, the Realtor® is working for the seller and not for you. While there is an implied agency relationship, the information you share may go directly to the seller unless you discuss agency relationship and confidentiality explicitly.
Education within the industry is improving, and Realtors® are required to explain agency relationships early on. However, this doesn’t always happen in practice. It’s crucial to know who is working for you and who is working for the other party. If a Realtor® offers to help you, make sure you understand your rights and the legal duties owed to you. By being informed and aware of agency relationships, you can better protect your interests and ensure a transparent and fair real estate transaction.
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