Types of Agency Relationships in Real Estate

female real estate agent meeting young couple standing in doorway while buying new house, copy space

Relationships, oh, relationships. You can’t live with them and you can’t live without them-particularly in real estate.

Therefore, it’s definitely a good idea to be aware of how the legal agreement between real estate agents and principals works when you represent someone as their agent. You have to be familiar with how it affects your relationships with other individuals or whether you’re looking to outsource your agents.

But first, we must learn about the individuals involved here. We have customers, clients, and principals.

A customer is an interested party that an agent deals with but is not represented by the agent. There is no fiduciary relationship owed to the customer. Although the customer can still demand “honest and fair” conduct from an agent, which is just good business practice, the customer may sue if the agent is dishonest during a transaction.

A client and principal are basically the same. They are both involved in the transaction and use the services of a real estate licensee. The licensee must treat the consumer fairly even though there is no fiduciary connection between them.

Finishing to successful deal of real estate, Broker and client shaking hands after signing contract approved application form, concerning mortgage loan offer for and house insurance.

What is an Agency Relationship?

When a buyer or seller signs an agency disclosure or agreement form, an agency relationship is formed, though the client is frequently not required by law to consent to anything. Most of the time, in an agreement or disclosure, the agent is working in the client’s best interests. This includes maintaining the privacy of their client’s information and offering sole legal counsel. 

Types of Agency Relationships

  • Seller’s agent

This is established when the seller hires a broker to represent them in the process of selling their listing. Their tasks involve helping the seller analyze the market to determine if it’s a good time to sell; giving the seller advice on maximizing the property’s value, and marketing the property, like hosting tours or organizing open houses, to name a few. 

  • Buyer’s agent

A fiduciary obligation is owed by an agent to the buyer. Because of this arrangement, the buying agent owes it to the buyer to negotiate the best price and terms for the sale. The buying agent’s fee is agreed, although it can be paid by either the buyer or the seller of the relevant real estate.

Portrait of real estate agent helping client choosing house in agency
  • Dual agent

These are the agents working for the same broker. They represent both the seller and the buyer in a transaction.

  • Non-agency relationship

This partnership is also known as a transaction broker and, in some situations, a facilitator. This kind of relationship is legal in some places, but the restrictions do change based on the location where the relationship is relevant. Most places do allow this kind of relationship to exist even while the licensee owes the client all of their fiduciary duties.

  • Express agency

An express agency is an agreement between the customer and the agent expressed either in writing or in a spoken agreement when selling multiple properties. Both are acceptable, but signing a written contract is the safest and legal way to purchase real estate


Working with a professional agent can assist you whether you’re buying or selling a home. Agencies or outsourcing companies can assist you in negotiating and, more importantly, in easing you through an otherwise time-consuming process. You can be confident that the right partner will safeguard your best interests, whether you are purchasing a home with a buyer’s agent or selling a home with a seller’s agent.

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