I find that the average consumer doesn’t understand agency representation. Most consumers make general assumptions that are usually wrong! Understanding agency representation is essential if you want to make sure that the agent that you choose to work with is going to keep your best interests in mind at all times.

The most common mistake that I feel consumers make is calling the listing agent to view a property of interest. A listing agent represents the seller and any information that you disclose to that agent could jeopardize your ability to negotiate. Working with the listing agent is okay if you fully understand agency representation but I do feel that it is important to hire your own buyer agent!

It is also important for you to realize the difference between being a customer and a client. A customer is someone who seeks to sell, exchange, purchase, rent or lease real estate, but has not hired the real estate licensee to represent them. As a customer, you can not expect the licensee to act as your agent or to advocate on your behalf. A real estate licensee can provide valuable market information and services to assist you as a customer. A licensee is always required to treat you honestly, disclose material defects known to the licensee, and to promptly present all offers and counteroffers. A licensee may also perform ministerial acts, which include showing property, preparing and presenting offers or agreements, and providing information and assistance concerning the transaction. A client is a person who establishes an agency relationship with a licensee through a written contract and agrees to be represented by the agent in a real estate transaction. The contract must clearly establish the terms and obligations of both the client and the licensee/firm who becomes the agent. As a client, you can expect the following client-level services: Advocacy, Care, Skill, and Diligence, Advice, Confidentiality, Loyalty, Lawful Obedience, and Promotion of the Client’s Best Interest.

Now that you understand the difference between a customer and a client, there are various types of agency relationships that are commonly practiced in New Hampshire.

A seller agent is a licensee who acts on behalf of a seller or landlord in the sale, exchange, rental, or lease of real estate. The seller is the licensee’s client and the licensee has the duty to represent the seller’s best interests in the real estate transaction.

A buyer agent is a licensee who acts on behalf of a buyer or tenant in the purchase, exchange, rental, or lease of real estate. The buyer is the licensee’s client and the licensee has the duty to represent the buyer’s best interests in the real estate transaction.

A single agency is the practice where the firm represents only one client in the transaction (either the buyer or seller).

A sub-agent is a licensee who works for one firm, but is engaged by the principal broker of another firm to perform agency functions on behalf of the principal broker’s client. A sub-agent does not have an agency relationship with the customer.

A disclosed dual agent is a licensee acting for both the seller/landlord and the buyer/tenant in the same transaction with the knowledge and written consent of all parties. The licensee cannot advocate on behalf of one client over another. Because the full range of duties cannot be delivered to both parties, all clients in the transaction must give written informed consent. A dual agent may not reveal confidential information without consent, such as:

1. Willingness of the seller to accept less than the asking price.
2. Willingness of the buyer to pay more than what has been offered.
3. Confidential negotiating strategy not disclosed in the sales contract as terms of sale.
4. Motivation of the seller neither for selling nor the motivation of the buyer for buying.

A licensee acting in a Non-Agency capacity shall only perform acts of an administrative nature (ministerial acts) which include showing property, preparing and presenting offers or agreements, providing information and assistance concerning the transaction. This relationship may change to an agency relationship by entering into a written contract for representation.

Having a concrete understanding of agency representation is important! As a consumer, you need to protect yourself by selecting an agent that can represent you that way that you want to be represented. If you have any more questions about agency representation, feel free to contact me with your questions.