Sports agent. Talent agent. Insurance agent. Real estate agent. What significance does the label "agent" hold, and why is it important when buying or selling a home?
Webster's dictionary defines an agent as "a person, firm, etc. empowered to act for another." For an "agency" relationship to exist, there must be a "principal" and an "agent." The principal is the person who empowers another to act as his representative, while the agent is the person empowered to act.
In real estate, an agency relationship is created when a seller signs a "listing agreement." The seller gives the broker authority to act on his behalf to locate a purchaser. The agent must be loyal to his principal, exercise competence, and when negotiating a sale, the agent must protect the principal's financial interests. The agent must also treat all third parties honestly and fairly.
It is also possible for an agency relationship to exist between a buyer and a broker. When this occurs, the broker's fiduciary loyalty is to the buyer, and all sellers must be treated honestly and fairly. In certain situations, the broker can represent both a buyer and seller as a disclosed dual agent. In that case, the broker represents both parties equally.
Whether buying or selling, it is critical to understand which parties make up the agency relationships. If in doubt, give us a call and we’d be happy to go over the details of agency relationships for your clarification.
Salesperson
For more information, contact Michael Sinton, CRB, CRS, SFR, e-Pro, Broker/Sales Associate, Weichert Realtors, directly at 732-904-3236, via email at Mike@MSinton.com.
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