Agency is the legal relationship where one person (the agent) represents another (the principal) in dealings with third parties. In real estate, understanding who you represent — and the duties you owe them — is both an ethical and legal requirement.
Agency roles
- Principal (client)
- The party the agent represents and owes fiduciary duties to.
- Customer
- A third party the agent works with but does not represent.
- Seller's agent
- Represents the seller; owes fiduciary duties to the seller.
- Buyer's agent
- Represents the buyer.
- Dual agent
- Represents both parties — only with informed written consent.
Fiduciary duties (O-L-D C-A-R)
- Obedience — follow lawful instructions.
- Loyalty — put the client's interests first.
- Disclosure — share all material facts.
- Confidentiality — protect the client's private information.
- Accounting — handle all money and documents properly.
- Reasonable care & diligence — act competently.