It is easy for anyone to be confused about whether or not they are being represented in a real estate transaction.  Many unrepresented buyers believe that the agent who shows them a property represents them in subsequent negotiations.  This natural misunderstanding may arise out of the amount of time an agent typically spends with the buyer and the professionally cordial relationship the agent properly seeks to build.  The buyer may confide confidential information to the agent and feel that he or she is being represented in the negotiations as well.  However, if the agent represents the seller, he  or she is obliged to pass on all relevant information and to represent only the sellers best interest.

To avoid problems with the issue of whom the agent represents, all states have enacted statutes that require an agent to give disclosed agency representation to any party with whom they have dealings but do not represent.  This alerts an unrepresented party to the fact that an agent who they have been working with does not represent their interests.  Depending on state law the disclosure may be required to be made at first contact with the non-client or customer, or at some other time; it may be required to be part of an offer or contract or a separate written form.  A real estate licensee must be knowledgeable about his or her state's particular disclosure requirements in order to provide effective representation and to avoid liability.