Who Does The Agent Represents- is it YOU?
Who does MY REALTOR represent? Did you hire an agent to represent YOU? In Florida many home buyers and home sellers hire an agent thinking the agent represents THEM in the transaction- and for many, that’s absolutely NOT the case. We ALWAYS discuss this with our customers, and 100% decide to hire us to represent them and understand if or why we might need to revise the plan.
Watch this short video to learn how to make the right choice next time you hire an agent!
Do you know what kind of relationship you have with your Florida real estate agent?
In the State of Florida, you can enter three types of relationships with a real estate agent or REALTOR®:
Single Agent, Transaction Broker, and No Brokerage Relationship. This will dictate the answer to the question of Who does “MY” REALTOR represent?
Each relationship varies by the level of representation a real estate agent will provide. A person who engages a real estate agent as a Single Agent becomes that agent’s client or “principal.” By law, the Single Agent has a fiduciary duty; meaning they must be obedient, loyal and provide full confidentiality; to the principal.
Having a fiduciary duty to both a seller and buyer in a transaction can cause serious conflicts of interest. This is what is referred to as a dual agency. It is not allowed in Florida, so many real estate sales are facilitated by a Transaction Broker.
Transaction Broker
A Transaction Broker Relationship provides limited representation. The customer has given up their rights to the agent’s undivided loyalty and, therefore, is not a client or “principal” of the agent.
This type of limited representation allows real estate agents to facilitate a transaction by assisting both the buyer and the seller, but will not work to represent one party to the detriment of the other.
The agent represents the transaction only.
Florida Statutes, states: “It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.”
Suppose you engage a real estate agent in Florida, either as a buyer or a seller. In that case, it is presumed that you have entered into a Transaction Broker Relationship unless the agent or broker provides you with a Single Agent or No Brokerage Relationship Agreement.
Transaction Broker duties include:
Dealing honestly and fairly.
Accounting for all funds.
Using skill, care, and diligence in the transaction.
Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
Limited confidentiality, unless waived in writing by a party.
This is intended to prevent the associate from disclosing that the seller will accept a price less than the asking or list price, that the buyer will pay a price greater than the price submitted in a written offer, or the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential.
Single Agent
Single-agent relationships are created when an agent agrees to act solely on behalf of a client, be they a seller or a buyer. Once a Single Agent relationship is established with an agent of a brokerage firm, all agents within that brokerage become Single Agents. All owe that client fiduciary duties. Every one of the brokerage’s agents must place the client’s interests ahead of their own and refrain from any self-dealing.
Single Agent duties include:
Dealing honestly and fairly.
Loyalty.
Confidentiality – everything that transpires during the relationship can never be disclosed unless the principal or client directs the agent to do otherwise – best to get this in writing.
Obedience – the agent must obey the principal as long as what the principal is directing the agent to do is within the law.
Full disclosure – Everything the agent discovers about the transaction, the property or the other party must be disclosed to the principal.
Accounting for all funds.
Skill, care, and diligence in the transaction.
Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
Disclosing all known facts that materially affect the value of residential real property and are not readily observable.
A challenge arises when a buyer in a single-agent relationship with a real estate agent wants to purchase a home listed with the agent’s broker. Before moving forward, both the buyer and the seller must consent in writing to Transition to a Transaction Broker. This releases the firm’s agents from their fiduciary duties. However, anything that transpired during the Single Agent Relationships continues to be protected by the Single Agent agreement- the agents can not disclose any confidential information obtained during that period without the written consent of their former clients.
Per Florida State law, the duties of a single agent must be fully described and disclosed in writing to a buyer or seller either as a separate and distinct disclosure document or included as part of another document such as a listing agreement or other agreement for representation.
No Brokerage Relationship representation
What about when a buyer without representation contacts a real estate agent who has a single agent relationship with a seller and wants to purchase the seller’s home?
What if the seller refuses to transition to a transaction broker? The buyer will either have to employ an agent from a different brokerage to represent him or the seller’s agent, by law, must have the buyer sign the No Brokerage Relationship disclosure.
This leaves the buyer with no representation in the transaction.
No Brokerage Relationship duties include:
Dealing honestly and fairly.
Disclosing all known facts that materially affect the value of residential real property which are not readily observable to the buyer.
Accounting for all funds entrusted to the licensee.
Whether you are buying or selling a home, make sure you understand the relationship you have established with the real estate licensee you have engaged. Know the answer- Who does MY REALTOR represent?
Want to know the other players in a transaction:- watch this next!
Reference: Florida Association of Realtors- Agency Disclosure Laws and Requirements
