Are you calling the number on the sign? Read this FIRST!

Real Estate Broker/Owner

Calling the listing agent to see a home? Wait! READ THIS FIRST

Are you someone who drives around, looking at homes and calling the numbers on the sign? Are you seeing homes with the agent who has the home listed? Do you look online trying to get in touch with listing agents? Before you continue doing these things, PLEASE READ THIS!

Many years ago, the Real Estate business was different. An agent would list a home and you would call them and set an appointment to see it. They may have taken you to other homes in the area, or they may have written your offer and presented it to the Seller that they were representing as a Listing Agent.

Today, we have a new designation called a BUYER’S AGENT. Much like an attorney, your Buyer’s Agent will represent you and the LISTING AGENT will represent the Seller. Why did this change? I am sure there are many reasons, but the main reason is because any information that you give away to the listing agent can AND will be held against you. If you were being sued by the Plaintiff, you would not go their attorney and divulge any personal information, would you? No, of course not! You would tell your attorney directly, and you would know that they are bound by the law not to tell anyone, especially the other attorney, anything that was said between you and your attorney. This is privileged information.

I recently had a listing, the Buyer called me off the sign. The first question I asked them was, ‘do you have a real estate agent’. They said ‘no’. Then they proceeded to give me their entire life story, and before I hung up, I knew that if they loved this home, they were willing to pay full asking price because they were in a hurry to move. Additionally, the husband was really rushing because he felt that his job may be on the line as the company he was working for had been ‘right-sizing’ (laying everyone off) and they needed a home NOW before he lost his job.

This is a LOT of information to tell someone, especially a Realtor, that you do not know, and one that represents the Seller. I could have very easily shown them the home, told the Seller about their story of woe and locked them into a full price purchase because I knew that they were eager.

Doesn’t this sound a little unfair? Let’s say I have a contract with the Seller. I cannot say to these Buyer’s ‘hey, it’s not a big deal because it turns out, my Sellers are getting a divorce. They barely owe anything on the house and they will take ANY offer at this point, they just want to be done and move!’ Of course I could not say anything like this because I am representing the Seller as a SELLER’S (LISTING) Agent. Everything they say to me must kept in the strictest of confidence. I have a Fiduciary Duty (I will cover this in a minute) to my Seller to be honest, fair and not tell anyone anything that they do not want shared with another party.

In Real Estate, we have the CLIENT. This is the person who hires the Broker (Real Estate Agent) to find a CUSTOMER. The customer is the Buyer, Seller or Tenant (depending on who hires whom).

What does FIDUCIARY DUTY even mean? It means: A legal obligation of one party (the Realtor)to act in the best interest of another (The Client). The obligated party (The Realtor) is typically a fiduciary, that is, someone entrusted with the care of money or property.

In a Real Estate transaction Michigan law requires the Real Estate Agent to give their Client the following: Skill, Care, Diligence, Loyalty, Obedience, Confidentiality, Disclosure, Accounting.

If this Realtor, who represents the Seller, finds you, the Customer, they only have to be honest and fair with you, provide reasonable care and skill with the transaction and disclose to you primarily agency disclosure, property condition and environmental hazards, if known. So if a strip club, a strip mall, an airport, a train station, whatever, is going up next to the house next year, and you don’t know about it, but that Listing Agent does, they do not have to tell you, unless you specifically ask.

WHOA! This is a pretty big deal! So if I am a Buyer and I have the Listing Agent show me the house, how can I expect that the Listing Agent will have ‘my best interest’ when they already have an Agency Disclosure Agreement (the Listing is ALSO enough to establish Agency) signed with the Seller that they have the Seller’s best interest? How can this be? Even when an attorney represents both sides of case, like in a divorce if all parties are in agreement, there is still always a release of duty signed by the one who didn’t hire the attorney.

So let’s talk about the different types of Agency Agreements that are legal here in Michigan. Keep in mind when the word BROKER is used, it means the REAL ESTATE AGENT representing the BROKERAGE for whom they work. As REAL ESTATE AGENTS, we ALWAYS represent our BROKERAGE.

Single Agency – This would refer to representing a CLIENT as either a SELLERS AGENT (Listing Broker) or a BUYERS AGENT (Buyer’s Broker).

Dual Agency – This Agent represents both Seller and Buyer in a transaction, but only with the KNOWLEDGE and INFORMED CONSENT IN WRITING, of BOTH the Seller and the Buyer. The Agent will not be able to disclose all known information to either the Seller or the Buyer, nor will the Agent be able to provide the range of fiduciary duties to the Seller or the Buyer.

Transaction Coordinator – This is an Agent who is not acting as an Agent (but MUST hold a real estate license in Michigan) and is only providing real estate services to both Seller and Buyer, and owes NO Fiduciary Duty to either party.

Designated Agency – If I have a Listing with a Seller (my Client), and another Agent that works for my Broker, brings me an offer from their Buyer (their Client), this is Designated Agency. Even though we both work for the same Broker, we still cannot disclose any confidential information to each other about our respective Clients.

In summation, if we look at the available types of Agencies, it only makes sense that one Agent represent ONE side of the transaction only. This way, Fiduciary Duty is always being honored. Further, it is absolutely FREE for you, as the BUYER to have an Agent represent you! Almost all agencies do charge (I am not aware of any that don’t) a compliance fee or an administrative fee to either the Buyer, if they are representing the Buyer, or the Seller if they are representing the Seller. Our fee is nominal, and the Agent who charges the fee is not paid one single dime of that fee. It goes to the Brokerage only. We have one of the lowest fees of any Brokerage in Michigan.

Before you tell ANY AGENT your personal story, or see any home, it is imperative that the agent has disclosed to you who they are representing and you should sign the Agency Disclosure Agreement, which every single Brokerage has and it MUST be signed. Ask your Agent to explain the agreement in terms you can understand (or take this cheat sheet with you) so there are no misunderstandings.


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Mark Loewenberg
KW of the Palm Beaches - Palm Beach Gardens, FL
KW 561-214-0370

so true to remember all of the aspects of our job as well as how we deal fairly with folks

Nov 29, 2014 09:17 AM #1
Shannon Hall
Autaugaville, AL

Agreed Mark. Hard to believe that Michigan still allows Dual Agency. Personally I think it's almost impossible to be fair to both sides. That is not to say that Agents will intentionally do/say something they should not, as I think most Agents hold themselves to a certain standard. But we are human beings first and that line can easily become blurred for various reasons. I do hope that everyone who wants to purchase or sell a home will understand the importance of having fair representation. And I hope that Michigan gets rid of Dual Agency! Thanks for your comment!

Nov 29, 2014 09:32 AM #2
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Outstanding post regarding the need for a buyer's agent.

Welcome to ActiveRain!

Nov 29, 2014 10:02 AM #3
Wayne and Jean Marie Zuhl
Samsel & Associates - Clark, NJ
The Last Names You'll Ever Need in Real Estate

Hi Shannon,

Welcome to ActiveRain!  It's wonderful the way you've explained different types of agency.

Nov 29, 2014 10:16 AM #4
Shannon Hall
Autaugaville, AL

Thank you Pete and Wayne & Jean, I appreciate the warm welcome! And the comments!

Nov 29, 2014 10:20 AM #5
Coach KC™ The Prosperitor™
Prosperitor LLC dba Secured Futures - Albuquerque, NM
Marketing • Productivity • Revenue • Development

Hi Shannon Hall!

Welcome to ActiveRain, wishing you much success here!

--Coach KC™

😎 Network Strong & Prosper!



Nov 29, 2014 11:25 AM #6
Shannon Hall
Autaugaville, AL

Thank you for the warm welcome!

Nov 29, 2014 12:20 PM #7
Captain Wayne - Rowlett Real Estate School
REcampus Fully Accredited Florida ONLINE & Classroom Training in Destin, Pensacola Florida - Panama City Beach, FL
Rowlett Real Estate School / Owner and Instructor

Excellent Post Shannon, welcome to ActiveRain, it's great to have you aboard.

Nov 29, 2014 02:41 PM #8
Samuel Nuon
Glen Allen, VA

Hi Shannon,

I truly impress your blog.  It is like a free 2 hours class on Agency brokerage.

I am so thankful that in my VA state, a disclosure form must be signed before performing any fiduciary duty.  

People are moving around.  Please do not hesite to email me, or call me, Samuel at (804)-237-8517. I will do the same if you are interested. Have a great day. Samuel

Nov 29, 2014 07:19 PM #9
Eileen Burns
Trans State Commercial RE Ft. Lauderdale/Miami/Palm Beach - Fort Lauderdale, FL
FL Probate Agent, Hotel & Land Specialist

Welcome to Active Rain Shannon!  Well written blog post about agency and well worth a feature...please joinActive Rain Newbie group and look for my post.

AR Newbie Feature


Nov 30, 2014 07:13 AM #10
Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

I saw your post listed on Eileen's post.

Welcome to ActiveRain and thank you for such a detailed first post here Shannon Hall !

Nov 30, 2014 09:17 AM #11
Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

Agency is an excellent blogtopic as it is so often misunderstood.  Welcome to ActiveRain.

Nov 30, 2014 12:41 PM #12
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Shannon Hall  In Texas, our first duty to a potential client is to explain agency.  It seems that no matter how many times we explain this concept, buyers driving around town or surfing the Internet impulsively call a listing agent.  I enjoyed your valuable first post.  I look forward to reading your future posts!

Dec 01, 2014 11:28 AM #13
Shannon Hall
Autaugaville, AL

Thank you Sharon, and everyone! Very nice to say. What a great community you have here!

@Sharon, we have the same duty here in MI and some Buyers think you're trying to sell them a bill of goods when you say it! I think that in general, people misunderstand what we do and don't see our value at times. How many times have you heard that 'anyone can sell real estate'? Well we know that's not the case, and getting it to the closing table? Only a Realtor can appreciate that last line...hehehe.


Wait, I think I feel another blog coming on! LOL

Dec 01, 2014 08:37 PM #14
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Welcome to AR!  If you haven't figured it out yet, it is ADDICTIVE!  

Dec 04, 2014 01:07 AM #15
Shannon Hall
Autaugaville, AL

LOL, Sharon, indeed! For me it's a nice break from the craziness while still keeping my head in the game!

Dec 04, 2014 03:45 AM #16
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