Representation

Understanding agency relationships is an important part of buying or selling a home. By definition, an "agent" is someone who represents the interests of another person or entity. Real estate agents (and the brokers who hold their licenses) may represent a home seller or buyer – or both, or neither.

Laws governing agency relationships differ from state to state and agency policies differ among real estate companies, but here are some basics:

When a real estate agent/broker represents a buyer or seller, that consumer is considered a client to whom "fiduciary duties" are owed. These duties can include confidentiality, obedience, fidelity, loyalty, accounting and reasonable skill and care.
When a real estate agent/broker does not represent a buyer or seller, that consumer is considered a customer. Though customers and real estate agents do not have a fiduciary relationship, the real estate professional has an obligation of honesty to all parties with whom she/he comes into contact.

In many states, real estate brokers may choose what types of agency they will practice. The options include:

Single agency
A single agency represents either the buyer or the seller. Single agents must:

Be loyal and act in your best interests;
Obey your lawful instructions;
Protect your confidences;
Exercise reasonable skill and diligence when answering your questions;
Be accountable for handling funds and paperwork;
Present all offers in a timely fashion; and
Execute other duties as outlined in your listing agreement or buyer's agency contract.

Dual agency
A dual agency represents both the buyer and seller, with disclosure to both parties. Among other tasks, dual agents must:

Treat all parties to the transaction fairly;
Disclose any material defects in the property;
Facilitate the sale of the property following contract acceptance; and
In nearly every state, a real estate agent is required by law to disclose the party (seller or buyer) in whose interest she/he is working. Such disclosure is usually made in writing, via an "Agency Disclosure Form" and/or broker document.