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Customer or Client: In Real Estate There is a Difference

By
Real Estate Agent with Jeff Fritzson Real Estate, Ebby Halliday Realtors 0629874

In a past life when I worked in the corporate world people referred to their opportunities using the words customer and client interchangeably. In real estate there is a big difference. Down here in Frisco Texas and I am sure throughout the nation, the definitions of a client and a customer are critical to understand regardless of if you are a buyer or a seller.

National and Texas Code of Ethics

In the Code of Ethics and Standards of Practice of the National Association of REALTORS®, Under Duties to Clients and Customers,  Article 1, standard of practice 1-2 you will find the following:

"As used in this Code of Ethics, “client” means the person(s) or entity(ies) with whom a REALTOR® or a REALTOR®’s firm has an agency or legally recognized non-agency relationship; “customer” means a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the REALTOR® or the REALTOR®’s firm"

The key difference is that as a customer you have not established an agency with a real estate agent or broker. This is important to understand when you are searching for a new home. In Texas, if you are showing a home, you by default represent the seller unless you have a buyer's agreement in place with a client. Then you represent the buyer. For a great understanding based on this scenario I highly recommend you read this article from the Examiner. I also want to share with you the Texas Real Estate Commission definition of a fiduciary relationship which is created once you sign a buyer's representation agreement.

Fiduciary Duties

"A fiduciary is a person who has a high duty of care for another person, the client. The law requires the fiduciary to place the client’s interest ahead of his or her interest. When a licensee begins to provide agency services to a party, or a party believes that such services are being provided, the fiduciary relationship begins.
 
Fiduciary relationships are common and can involve attorneys, trustees, investment brokers and real estate agents, among others. The principal, or client, is the person with whom the licensee has a fiduciary relationship. Although the licensee’s duty is to act in the principal’s interest, the licensee owes a duty of honesty and fairness to all parties in the transaction."

 

Starting a Search, Choose an Agent

When you start your search for a home you most likely have made the decision to at least investigate the options of moving. You have probably found some websites that provide homes for sale information. If you are have already determined the area you want to move to NOW is the time to start looking for a real estate agent whom you feel confident will professionally represent you and ensure they put your needs and requirements above everyone else including their own.

Once you have decided on the location, reach out to several real estate agents and see which one will work with you in a manner you are comfortable. Think about what you want from an agent. Ask them questions and allow them to provide you with answers and recommendations that will differentiate them from other Realtors®. Some important reasons for you to work with an agent as a buyer include: local expertise, getting you more information on a particular home and homes in the area (such as sold data), and as an expert guide to assist you in reducing risk exposure and maximizing your purchasing power.
 
Of course if you are in the DFW area, just drop by my website and you can start your search, get a market snapshot, ask for a CMA, discuss the buying or selling process and learn more about the area you are interested in purchasing or selling your next home. Many of my customers become clients as they know when you are my client: Your Success is My Focus
Kathy Streib
Cypress, TX
Home Stager/Redesign

Jeff- a well written and informative post!  I had floundered with which word to useand now I know. 

Featured in Bananatude

Bananatude

Jan 23, 2014 02:10 AM
Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Yes, there is a big difference here, esp in real estate.  This is one of the reasons it's so important to have a real estate agent who truly represents your interests.  Commitment is a two way street.

Jan 23, 2014 02:11 AM
Jeff Fritzson: Frisco Real Estate Pro
Jeff Fritzson Real Estate, Ebby Halliday Realtors - Frisco, TX
Your Success is My Focus!

Hi Kathy - thank you for your kind words and feature in Bananatude. I am glad you found it helpful.

Hi Debbie - I appreciate and respect your comments and perspective. Thanks for commenting.

Jan 23, 2014 02:16 AM
Jon Kolsky
Kolsky Realty & Management - Long Beach, CA
Licensed California Real Estate Broker

Jeff~ I can see why this post is featured in Bananatude, you explain the value of our services to the T.... We need to meet or surpass the expectations RE consumers have... oh, BTW: suggested

Jan 23, 2014 02:58 AM
Jeff Fritzson: Frisco Real Estate Pro
Jeff Fritzson Real Estate, Ebby Halliday Realtors - Frisco, TX
Your Success is My Focus!

Hey Jon - Thanks for your kind words and comment. Both are appreciated.

Jan 23, 2014 03:25 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Jeff, There is a big difference.  Not only do consumers need to know the difference but many agents need to understand the difference as well.

 

Jan 23, 2014 04:15 AM
Jeff Fritzson: Frisco Real Estate Pro
Jeff Fritzson Real Estate, Ebby Halliday Realtors - Frisco, TX
Your Success is My Focus!

Hi Kathleen - thanks for your comments and perspective. They are always welcome.

Jan 23, 2014 04:27 AM
Maria Gilda Racelis
Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington - Manchester, CT
Home Ownership is w/in Reach. We Make it Happen!

Hi Jeff: It is good to know that sub agency is still practiced in some parts of the state. Here in CT, sub agents no longer exist.

Jan 23, 2014 04:31 AM
Jeff Fritzson: Frisco Real Estate Pro
Jeff Fritzson Real Estate, Ebby Halliday Realtors - Frisco, TX
Your Success is My Focus!

Hi Maria - that is interesting. I had no idea about that in CT. Must be interesting how you handle confidentiality when holding an open house or many other scenarios. As an agent who understands this you should be in demand in your area. Thanks!

Jan 23, 2014 05:19 AM
Shannon Milligan, Richmond VA Real Estate Agent/Associate Broker
RVA Home Team - Richmond, VA
RVA Home Team - Winning with Integrity.

Singed buyer agency agreement: client. Inquiring about a listing: customer. There is a difference, an important one!

Jan 23, 2014 05:38 AM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Nice job with your post. As you already know there is a huge difference, the sad part about it, many in our industry don't know there difference.

Jan 23, 2014 05:21 PM
Jeff Fritzson: Frisco Real Estate Pro
Jeff Fritzson Real Estate, Ebby Halliday Realtors - Frisco, TX
Your Success is My Focus!

Hi Shannon - you cut right to the chase and I would onlyu add that a signed listing agreement:client as well. Thanks for commenting and sharing your perspective.

Thank you Joe - yes that is sad for our industry. We should all be aware of these basics that can really increase risk without that knowledge. Thanks for your comments.

Jan 24, 2014 12:17 AM