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There are several roles that a real estate agent can play in a transaction:
It is important to understand each of these roles and how they can impact the purchase, sale or lease of your home.
Buyer/Tenant’s Agent
A Buyer/Tenant’s Agent acts solely in the best interest of their client. A Buyer/Tenant’s Agent has fiduciary duties to the Buyer/Tenant that include reasonable care, obedience, accounting, loyalty, confidentiality and full disclosure. A Buyer/Tenant’s Agent must act honestly and fairly with all parties to the transaction.
Seller/Landlord’s Agent
A Seller/Landlord’s Agent, or Listing Agent acts solely in the best interest of their Seller/Landlord. A Listing Agent has fiduciary duties to the Seller/Landlord that include reasonable care, obedience, accounting, loyalty, confidentiality and full disclosure. Although a Listing Agent does not represent the Buyer, a Listing Agent must treat buyers honestly and fairly. A Listing Agent must also disclose any material facts about the listed property that are known to the agent.
Dual Agent
A Dual Agency occurs when a single brokerage firm (for example Berkshire Hathaway HomeServices) has entered into a written agency relationship with both the Buyer/Tenant and Seller/Landlord of a single real estate transaction. This occurs even when the two parties are represented by individual agents from different offices of the same brokerage firm.
In a Dual Agency, the Brokerage firm does not represent either the Buyer/Tenant or Seller/Landlord exclusively, and the parties can not expect the Brokerage Firm’s undivided loyalty.
The Brokerage Firm may not disclose to either the Buyer/Tenant or Seller/Landlord any personal, financial, or confidential information of the other party except as authorized by either party or required by law. For example, the Brokerage Firm may not disclose, unless otherwise instructed by the respective party:
- to Buyer/Tenant that Seller/Landlord will accept less than the asking or listed price
- to the Seller/Landlord that the Buyer/Tenant can pay a price greater than the price submitted in a written offer to the Seller, unless otherwise instructed to do so in writing by the Buyer/Tenant
- the motivation of either Buyer/Tenant or Seller/Landlord for selling, buying, leasing the property
- that the Buyer/Tenant or Seller/Landlord will agree to financing terms other than those offered.
Connecticut law allows the Brokerage firm to be a dual agent, but only after both Buyer/Tenant and Seller/Landlord understand what dual agency is and consent to it.
Designated Agent
Designated Agency occurs when the Brokerage Firm involved in a Dual Agency situation assigns one broker/salesperson to solely represent the Buyer/Tenant as a Designated Buyer’s Agent, and another to solely represent the Seller/Landlord as a Designated Seller’s Agent.
A Designated Buyer’s Agent and Designated Seller’s Agent owe the party for whom they have been appointed undivided fiduciary obligation, such as loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability. The Designated Agent is not deemed to be a Dual Agent, and thus does not owe fiduciary duties to the other party. A Designated Agent may use confidential information obtained about the other party while a Designated Agent for the benefit of the party for whom they have been appointed, however, information obtained before the designation is still confidential. In the case of Designated Agency, the Brokerage Firm is still considered a Dual Agent.