What are they?
Agency in its simplest form, basically defines how a client is represented in a transaction. It is defined as follows:
Agency Relationships in residential real estate transactions involve the legal representation by a real estate broker (on behalf of a real estate company) of the principal (the client), whether that person or persons is a buyer or a seller. The broker (and his/her licensed real estate agents) then becomes the agent of the principal.
There are three types of Agency relationships. There is Seller Agency, where the broker and the agent agree to represent the seller in the transaction. There is Buyer Agency, where the broker and the agent agree to represent the buyer in the transaction. Finally there is Limited Dual representation where the broker is in the position of representing both the seller and the buyer in the transaction.
Under Agency the broker/agent has the fiduciary duties of loyalty, obedience, disclosure, confidentiality and accounting to the party they are representing.
When the broker/agent is representing both parties a separate agreement called Consent to Limited Representation is required. Both the buyer and the seller must agree to this type of representation in writing. This document does limit what the Broker/Agent can disclose to the other party. Quoting from the document itself it says: “There will be conflicts in the duties of loyalty, obedience, disclosure and confidentiality.
Regardless of who the Broker/Agent represents in the transaction, the Broker/Agent shall exercise reasonable skill and care in the performance of their duties. They shall be fair and honest in their dealings with both parties. Brokers/Agents have the duty to disclose all known facts which materially and adversely affect the consideration paid by any party.
Click here to review a copy of the Arizona Real Estate Agency Disclosure and Election form. When you decide to hire a Broker/Agent to help you Sell or Buy a property, your agent should have a discussion with you about Agency and provide you with an opportunity to choose the type of representation you want before any discussions about any property occur. A good agent will insist on having the discussion to get a commitment from you that you want their help in marketing or finding a property. By having the discussion and providing you with the opportunity to choose they type of representation you want, all parties have a clear understanding of each other and their expectations going forward.
If you have any questions about this information, please feel free to call me. I will be happy to discuss it with you further.
Sandra Paulow, Associate Broker, GRI, SFR, REALTOR®
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