Agency Relationships With Clients Versus Non-agency Relationships With Customers
- Relationship: Conventionally, the broker provides a conventional full-service, commission-based brokerage relationship under a signed listing agreement with a seller or "buyer representation" agreement with a buyer, thus creating under common law in most states an agency relationship with fiduciary obligations. The seller or buyer is then a client of the broker. Some states also have statutes that define and control the nature of the representation.
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, 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.
- Non-agency relationship: where no written agreement nor fiduciary relationship exists, a real estate broker (and his agents) works with a principal who is then known as the broker's customer. When a buyer, who has not entered into a Buyer Agency agreement with the broker, buys a property, then that broker functions as the sub-agent of the seller's broker. When a seller chooses to work with a transaction broker, there is no agency relationship created.
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Famous quotes containing the words agency and/or clients:
“It is possible that the telephone has been responsible for more business inefficiency than any other agency except laudanum.... In the old days when you wanted to get in touch with a man you wrote a note, sprinkled it with sand, and gave it to a man on horseback. It probably was delivered within half an hour, depending on how big a lunch the horse had had. But in these busy days of rush-rush-rush, it is sometimes a week before you can catch your man on the telephone.”
—Robert Benchley (1889–1945)
“...a lot of my people are models. I like that for them. I admire models, so I think that’s right for my people. ...I love it when I have an important [client]. And the pictures and awards. One of my clients has these television awards—a beautiful statue of a woman. I think it’s an Emmy. People would be lucky to get one. She has two. I think that’s great.”
—Elaine Strong (b. 1934)