Is My Real Estate Agent Really Working for Me- Understanding Real Estate Agency

Understanding Real Estate AgencyWhen it come time to buy or sell a house, most people call a real estate agent to aid in their home sale or purchase.  Whether you are buying or selling a home, understanding real estate agency is critical.  It is first important to understand how your real estate agent is working for you.  Secondly, you can run into other agents along the way and is important you understand the relationship you have with each agent.

Real Estate Agency is at the core of every real estate transaction, but is also the most overlooked aspect of real estate by buyers and sellers.  Home buyers in particularly ignore real estate agency and how “their” real estate agent is supposed to interact with them.  I use the term “their” loosely as the agent they are working with may not truly be “their” agent.

Home buyers, I implore you to read this article on understanding real estate agency.  There are more options in how you work with an agent than you think.  I am going discuss how a Massachusetts Real Estate Agent can work for you.  If you don’t know what anyone of them means you need to take the time to understand:

Selling Agent, Buyers Agent, Facilitator, Dual Agent, Designated Agency, Non Designated Agency

Note: agency laws vary from state to state, so check with your particular state,  though most states have  very similar agency laws to Massachusetts.

Understanding Real Estate Agency

What Is Real Estate Agency?

First and foremost Real Estate Agency is to protect the consumer.  It is at the crux of how an agent interacts with you. When you hear real estate agency you usually think about your local real estate office. 

But, the the term goes much deeper from a business sense.  Real Estate Agency is about a legal relationship that is formed.

Typically in the business world if some one is an agent, they have a fiduciary responsibility to a principal.  An agent is obligated to act on behalf and for the best interest of their principal.

So in the real estate realm, agency is a legal relationship formed between the agent (real estate agent) and the principal (home buyer or home seller).

Along with an agency relationship comes some basic fiduciary responsibilities an agent has to a client.

  1. Fiduciary Responsibility- A fiduciary responsibility is the highest standard of care.  Your needs, as the real estate client must come before anything else.
  2. Confidentiality-  Anything that is known about you or discussed with you is confidential.  Nothing can be disclosed without your explicit permission.
  3. Obedience-  Your agent must lawfully carry out your instructions.
  4. Accountability-  Your agent must always give you a complete accounting of your transaction.
  5. Loyalty-  Your agent must put you before a others, their own company, and their own beliefs.  They must do what is best for you.

So when you are in an agency relationship with an agent their responsibilities are much like a lawyers responsibility to you.  Realize just because you are talking to an agent an agency relationship is not formed.

A Real Estate Agents Obligation To Disclose Their Agency Relationship With You

A real estate agent is obligated, by law to disclose their agency relationship to you at the first face to face meeting to discuss a specific property.  This disclosure is done through the MASSACHUSETTS MANDATORY LICENSEE-CONSUMER RELATIONSHIP DISCLOSURE.  

The disclosure covers the different agency and non-agency relationships.  Their is a check box to pick the relationship and both agent and consumer sign.

If you call an agent about a property to schedule a showing, the first thing they must do is disclose the relationship to you upon meeting you at the property.  Both the real estate agent and the real estate client must sign acknowledging the disclosure has been presented.  If a real estate agent does not present you with the agency disclosure , they are acting above the law and it is wrong!! 

Do you really want to work with them?  Where else will they short change you.

The one and only situation where the agency disclosure is not required is when you attend an open house.  Then a sign must be prominently displayed stating the agent is working for the seller.  This means the attending agent is most likely the listing agent and has a real estate agency relationship with the seller.

The sole job of the agent at the open house is to sell you the house for the price the seller wants.  Period.  They are not their to help you buy the house and guide you through the process to your benefit. They are there to get the best deal they can for the seller.

Understanding Real Estate Agency- How Can Your Agent Work For You?

Here we are going to discuss the different agency and non-agency relationships in which an agent can work for you.  In most cases a seller contracts a sellers agent.  It has been the way it has been done for many many years.  But over the years a buyer has many choices.

Sellers Agent

When a seller engages a real estate agent to as a Sellers Agent there is an agency relationship formed.  The sellers agent owes the seller the basic fiduciary responsibilities spelled out above.  It is the seller’s agents job to give an opinion of value, help prepare the home, properly market the property, expose it to the most amount of buyers, secure an offer, help negotiate the offer, negotiate repairs after a home inspection and bring the transaction to a smooth closing all to the benefit of the seller…. not the buyer, not themselves, but the seller. 

Bear in mind there is one case where a sellers agent may not always act in the best interest of the seller and that is when it comes to property disclosure.  A real estate agent is bound by law to disclose any material defects in a home even if it goes against the sellers wishes.

Buyer’s Agent

A buyer can engage the services of an agent to act on their behalf as a buyer’s agent.  Again, when the agency relationship is formed the buyer’s agent owes the buyer the basic fiduciary responsibilities laid out above.  A buyer’s agent can offer a whole slew of services from helping to set expectations arrange financing on a home, provide tools to find a homes for sale, prepare and negotiate an offer, help arrange professionals like home inspectors attorney etc…, negotiate an home inspection issues and bring the transaction to a smooth closing to the sole benefit of the home buyer.


A facilitator is a non- agency relationship as the real estate agent works for neither the buyer or seller.  There job is to assist buyer and seller in putting an agreement together.  There duties are more of a ministerial nature rather than consultive.  A facilitator is bound to act honestly and fairly but has no loyalty and owes neither party confidentiality or even obedience.

Designated Buyer’s and Seller’s Agent (at the office level)

This is a newer agency relationship that has been created.  It allows two real estate agents from the same office to each represent a seller or a buyer in the same transaction.  It is important to understand this agency relationship as it comes into play when one agent from the same office brings a buyer to a listing from another agent in the same office.   Note that the mandatory state disclosure discloses whether the agents firm is a designated office or a non-designated office.

In this case each agent can represent their client fully as a buyer’s agent or a seller’s agent.  At the end of the day the real estate broker of the designated office is a dual agent, but they rarely get involved with the buyer or seller so it is generally a non-issue. 

Dual Agency

Dual Agency happens in two ways.  The first is if one agent is in an agency relationship with both the buyer and seller. Or, if two agents in a non-designated agency office represents a buyer and seller individually.  Dual agency must be disclosed to both buyer and seller prior to the offer being tendered. And, both parties must agree. 

When in a dual agency relationship an agent or agents cannot favor one party over another.  They must remain neutral.  A dual agent cannot satisfy all of their obligations to a party if the interest conflicts between buyer and seller.  For example an agent cannot give the either the buyer or seller opinion of value, recommend vendors, give negotiating advice, etc….

When a buyer and seller are in a dual agency situation they are giving up many services and rights that are available to then from a buyer or seller’s agent.

Don’t Assume A Real Estate Agent Works For You

Never, ever assume a real estate agent works for you.  Always make sure you understand the relationship the agent your speaking with has with you.  For example a home buyer can buy a home with any of these types of real estate agency. 

Quite frankly so can a seller, though rare.  I have seen sellers list their home with transactional agents, knowingly or not, I am not sure.

Why?  How you interact and what you tell your buyer’s agent will be very different than how you would interact and tell a seller’s agent or a facilitator.  Neither owes you confidentiality and can use information you have disclosed against you. 

Another situation is if you go directly to a sellers agent to buy a house with out the representation of a buyers agent, they cannot offer you many of the services a buyer’s agent can. For example a seller’s agent cannot give you an opinion of value, they can only suggest and try to support the full list price.  While they must present your offer they cannot negotiate on your behalf as well.  They cannot provide you with preferred vendors or counsel you on the best way to negotiate.  You are on your own.

I cannot tell you how many times as a sellers agent buyers have revealed things me such as they LOVE the house and they HAVE to get a house under contract by a certain time.  As a seller’s agent if that buyer tenders an offer I have to disclose what the buyer said to me and gives the seller a negotiating edge over the home buyer.

Understanding Real Estate Agency

Final Thoughts on Understanding Real Estate Agency

The agency relationship you have with “your agent” is so important and is often overlooked mostly by home buyers.  Why a home buyer would not want to be represented by an experienced buyers agent is beyond me.  There is so much to a real estate transaction home buyers don’t even know what they don’t know.

I have seen buyer’s go directly to the seller’s agent to buy a house.  They are not represented in any way by an agent.  Yet they will call the seller’s agent “their agent”!!  EEEK, if that is the case you are not getting it

When you are selling a home it is usually a given your contracting with a seller’s agent.  But it important to understand that the agents showing your home most likely represent the buyer.  If you happen to run into the buyer and their agent as you are leaving or forever whatever reason you are not leaving for showings (which I don’t recommend), keep your mouth shut!  Do not volunteer information.  If you are asked a question direct them to ask all questions thru your seller’s agent. 

I will also give my opinion on dual agency here.  Don’t do it.  While dual agency legal, I think it is unethical.  Can a lawyer act as a prosecutor and represent the defendant… no.  So why should a real estate agent be able to represent a both a buyer and seller in the same transaction.  In most cases dual agency is not worth it.  You are giving up so many rights as either a home seller or home buyer.   If you have ever heard it said…. you can’t serve two masters….  well this is the case with dual agency.

Slow down and down and make sure you understand real estate agency, don’t be so anxious to look at pretty houses without making a decided decision of how you want to work with an agent. How an agent works for you and their abilities can make or break you.  Real estate agency is where your whole home buying or selling process begins.  It can save you a ton of aggravation, time and maybe even money!

Other Resources on Real Estate Agents and Real Estate Agency:

Is My Real Estate Agent Really Working for Me- Understanding Real Estate Agency, was provided by Kevin Vitali of EXIT Group One Real Estate of Tewksbury MA. If you would like to sell or buy a home give me a call at 978-360-0422 and let’s get the process started.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding area- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

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