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What Does Agency Mean In Real Estate

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Real Estate Agent with Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL

What Does Agency Mean In Real Estate

What Does Agency Mean In Real Estate...well the short answer is that it's the relationship between an agent and a principal or client in a transaction.  With some agency relationships there is a fiduciary element which not only implies, but is written into law a relationship of trust and confidentiality.

There are different levels of agency that may be implied or express.  The strongest or highest form of agency is the Universal Agent that can represent a client in any transaction.  Next, is the General Agent who represents a client in specific business activities.  A Special Agent represents a client in a specific transaction.  The Special Agent is usually the broker hired by a buyer or seller in most real estate transactions.  The Designated Agent is an agent who hangs his license with the broker and represents the client.  This agent has a fiduciary agency with the client and is the only agent in the brokerage who does which allows other licensee's in the same brokerage to represent clients/principals on the other side of the same transaction.

As stated earlier, agency can be implied or express.  Expressed agency can be written or oral while implied agency is created by the action of the agent and client or principal. For instance; if a for sale by owner offers a 3% commission to agents who procure a viable buyer...that offer establishes an implied relationship.  Agency relationship may be terminated by mutual agreement, abandonment or an agent may quit or discontinue the agency as well as the client, or by fulfillment of the agents duty to the client.  Some scenarios may create a breach of contract with the possibility of a law suit.

Whether an individual is being represented or not, real estate agents are held to a standard of treating all parties with honesty and fairness and proper disclosure of any know fact.  However, an agents main focus and fiduciary responsibility is to his or her client.  The agent owes his client; care and skill, obedience within the frame work of the law, account for all monies and loyalty to the client putting the clients needs and interests before all others including the agents.

Nick T Pappas  

If you need a knowledgeable real estate professional in Madison or Huntsville Alabama area, why don't you let me Google that for you!  I also know outstanding agents in all states and Canada should you need help relocating to a new area.

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Comments (8)

F U
nobody - Alamance, NT
Dead
Bravo, if we could only get half the agents to follow agency rules.....
Jan 12, 2011 02:28 PM
Don Wixom
RE/MAX Executives Nampa, ID - Nampa, ID
"Looking out for your next move..."tm

Nick, it's interesting to hear about agency laws from a different state. There is no implied agency in Idaho. It must be in writing (expressed).

Jan 12, 2011 02:30 PM
Elizabeth Cooper-Golden
Huntsville Alabama Real Estate, (@ Homes Realty Group) - Huntsville, AL
Huntsville AL MLS

Great explanation my friend!  I really struggled with the Agency difference from Tennessee to Alabama.  Have a great rest of the week!

Jan 12, 2011 02:37 PM
Nick T Pappas
Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Janine-agreed.  That in my opinion is one of the reasons why the negative perception of agents.

Don-I forgot to put the disclaimer in the post, but yes states write their own laws and consumers need to be aware of that.

Beth-as you know I also have an Illinois license and have had to make some adjustments with Alabama rules, reg's and license law.  Hey I'm starting to get a bit jealous...what with you meeting all those other guys in NY!

Jan 12, 2011 02:50 PM
Laura Giannotta
Keller Williams Realty - Atlantic Shore - Little Egg Harbor, NJ
Your Realtor Down the Shore!

There are so many differences in agency from state to state.  We've got to have it in writing, and we've got to provide the information before discussing anything with a client!  This is a great post for Alabama home buyers and sellers.

Jan 12, 2011 10:09 PM
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

Hi Nick, looks like we have the same agencies in NY as you do. It all has to be in writing. Great explanation!

Jan 12, 2011 11:47 PM
Nick T Pappas
Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Hi Laura-we also have to provide a RECAD to inform clients of the ways we may assist or represent them.

Jackie-not much grey area when it's in writing.

Jan 13, 2011 08:55 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Nick, this is something that Buyers and Sellers need to understand right off the bat, and can avoid problems down the road.

Jan 13, 2011 11:51 AM