Understanding Real Estate Agency

Dated: February 18 2025

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Understanding Real Estate Agency: What Buyers & Sellers Need to Know

A real estate agency is a legally binding relationship between agents, brokers, and their clients during a property transaction. Each state has its own rules and licensing requirements, affecting how agents can represent buyers and sellers.

Types of Real Estate Professionals

Brokers – Can work independently and own agencies.
Agents – Must work under a broker’s supervision. When you hire an agent, you’re actually hiring the broker.

Types of Agency Relationships

Seller’s Agent – Represents the home seller’s best interests.
Buyer’s Agent – Advocates for the homebuyer throughout the process.
Dual Agency – Some states prohibit agents from representing both parties in the same transaction. In these cases, a broker may assign another agent as a designated agent with limited fiduciary duties.

New Rules for Homebuyers

New federal regulations require written agreements between buyers and agents before touring homes. This means buyers must either agree to pay an agent’s fee or negotiate for the seller to cover it.

Why Agency Matters

Choosing the right representation ensures your interests are protected throughout the transaction. Whether you're buying or selling, understanding agency laws helps you navigate real estate with confidence.

 

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Alex Mabry

I am passionate about real estate! Growing up we moved around a lot, with a family of 7 my parents would find a diamond in the rough to transform into our family home, my allowance was earned helping ....

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