Real estate agents can provide many useful services and work
with you in different ways. In some real estate transactions,
the agents work for the seller. In others, the seller and buyer
may each have agents. And sometimes the same agents work for
both the buyer and the seller. It is important for you to know
whether an agent is working for you as your agent or simply
working with you while acting as an agent of the other party.
This brochure addresses the various types of
working relationships that may be available to you. It should help
you decide which relationship you want to have with a real estate
agent. It will also give you useful information about the various
services real estate agents can provide buyers and sellers, and it
will help explain how real estate agents are paid.
SELLERS - The Seller's Agent
If you are selling real estate, you may want to
"list" your property for sale with a real estate firm.
If so, you will sign a "listing agreement" authorizing
the firm and its agents to represent you in your dealings with
buyers as your seller's agent. You may also be asked to allow
agents from other firms to help find a buyer for your property.
Be sure to read and understand the listing
agreement before you sign it.
Duties to Seller - The listing firm and
its agents must
-
promote your best interests
-
be loyal to you
-
follow your lawful instructions
-
provide you with all material facts that could
influence your decisions
-
use reasonable skill, care and diligence, and
-
account for all monies they handle for you.
Once you have signed the listing agreement, the
firm and its agents may not give any confidential information
about you to prospective buyers or their agents without your
permission. But until you sign the listing agreement, you should
avoid telling the listing agent anything you would not want a
buyer to know.
Services and Compensation:
To help you sell your property, the listing firm
and its agents will offer to perform a number of services for you.
These may include
-
helping you price your property
-
advertising and marketing your property
-
giving you all required property disclosure
forms for you to complete
-
negotiating for you the best possible price
and terms
-
reviewing all written offers with you and
-
otherwise promoting your interests.
For representing you and helping you sell your
property, you will pay the listing firm a sales commission or fee.
The listing agreement must state the amount or method for
determining the commission or fee and whether you will allow the
firm to share its commission with agents representing the buyer.
Dual Agent
You may even permit the listing firm and its
agents to represent you and a buyer at the same time. This
"dual agency relationship" is most likely to happen if
an agent with your listing firm is working as a buyer's agent with
someone who wants to purchase your property. If this occurs and
you have not already agreed to a dual agency relationship in your
listing agreement, your listing agent will ask you to sign a
separate agreement or document permitting the agent to act as
agent for both you and the buyer.
It may be difficult for a dual agent to advance
the interests of both the buyer and seller. Nevertheless, a dual
agent must treat buyers and sellers fairly and equally. Although
the dual agent owes them the same duties, buyers and sellers can
prohibit dual agents from divulging certain confidential
information about them to the other party.
Some firms also offer a form of dual agency called
"designated agency" where one agent in the firm
represents the seller and another agent represents the buyer. This
option (when available) may allow each "designated
agent" to more fully represent each party.
If you choose the "dual agency" option,
remember that since a dual agent's loyalty is divided between
parties with competing interests, it is especially important that
you have a clear understanding of
what your relationship is with the dual agent and
what the agent will be doing for you in the
transaction.
BUYERS
When buying real estate, you may have several
choices as to how you want a real estate firm and its agents to
work with you. For example, you may want them to represent only
you (as a buyer's agent). You may be willing for them to represent
both you and the seller at the same time (as a dual agent). Or you
may agree to let them represent only the seller (seller's agent or
subagent). Some agents will offer you a choice of these services.
Others may not.
Buyer's Agent - Duties to Buyer:
If the real estate firm and its agents represent
you, they must
-
promote your best interests
-
be loyal to you
-
follow your lawful instructions
-
provide you with all material facts that could influence
your decisions
-
use reasonable skill, care and diligence, and
-
account for all monies they handle for you.
Once you have agreed (either orally or in writing)
for the firm and its agents to be your buyer's agent, they may not
give any confidential information about you to sellers or their
agents without your permission. But until you make this agreement
with your buyer's agent, you should avoid telling the agent
anything you would not want a seller to know.
Unwritten Agreements:
To make sure that you and the real estate firm
have a clear understanding of what your relationship will be and
what the firm will do for you, you may want to have a written
agreement. However, some firms may be willing to represent and
assist you for a time as a buyer's agent without a written
agreement. But if you decide to make an offer to purchase a
particular property, the agent must obtain a written agency
agreement. If you do not sign it, the agent can no longer
represent and assist you and is no longer required to keep
information about you confidential. Furthermore, if you later
purchase the property through an agent with another firm, the
agent who first showed you the property may seek compensation from
the other firm.
Be sure to read and understand any agency
agreement before you sign it.
Services and Compensation:
Whether you have a written or unwritten agreement,
a buyer's agent will perform a number of services for you. These
may include helping you
If you have a written agency agreement, the agent
can also help you prepare and submit a written offer to the
seller.
A buyer's agent can be compensated in different
ways. For example, you can pay the agent out of your own pocket.
Or the agent may seek compensation from the seller or listing
agent first, but require you to pay if the listing agent refuses.
Whatever the case, be sure your compensation arrangement with your
buyer's agent is spelled out in a buyer agency agreement before
you make an offer to purchase property and that you carefully read
and understand the compensation provision.
Dual Agent
You may permit an agent or firm to represent you
and the seller at the same time. This "dual agency
relationship" is most likely to happen if you become
interested in a property listed with your buyer's agent or the
agent's firm. If this occurs and you have not already agreed to a
dual agency relationship in your (written or oral) buyer agency
agreement, your buyer's agent will ask you to sign a separate
agreement or document permitting him or her to act as agent for
both you and the seller. It may be difficult for a dual agent to
advance the interests of both the buyer and seller. Nevertheless,
a dual agent must treat buyers and sellers fairly and equally.
Although the dual agent owes them the same duties, buyers and
sellers can prohibit dual agents from divulging certain
confidential information about them to the other party.
Some firms also offer a form of dual agency called
"designated agency" where one agent in the firm
represents the seller and another agent represents the buyer. This
option (when available) may allow each "designated
agent" to more fully represent each party.
If you choose the "dual agency" option,
remember that since a dual agent's loyalty is divided between
parties with competing interests, it is especially important that
you have a clear understanding of
This can best be accomplished by putting the
agreement in writing at the earliest possible time.
Seller's Agent Working With a Buyer
If the real estate agent or firm that you contact
does not offer buyer agency or you do not want them to act as your
buyer agent, you can still work with the firm and its agents.
However, they will be acting as the seller's agent (or
"subagent"). The agent can still help you find and
purchase property and provide many of the same services as a
buyer's agent. The agent must be fair with you and provide you
with any "material facts" (such as a leaky roof) about
properties.
But remember, the agent represents the
seller—not you— and therefore must try to obtain for the
seller the best possible price and terms for the seller's
property. Furthermore, a seller's agent is required to give the
seller any information about you (even personal, financial or
confidential information) that would help the seller in the sale
of his or her property. Agents must tell you in writing if they
are sellers' agents before you say anything that can help the
seller. But until you are sure that an agent is not a seller's
agent, you should avoid saying anything you do not want a seller
to know.
Sellers' agents are compensated by the sellers.
The North Carolina Real Estate Commission
P.O. Box 17100
Raleigh, North Carolina 27619-7100
919/875-3700
Web Site: www.ncrec.state.nc.us