Single Agency Relationship
Understanding real estate agency relationships from the perspective of Seller representation.
How Transaction Broker or Dual Agency can work against sellers
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Single Agency In Florida:
The 3 licensee statuses for Brokers and Agents are: "Single Agent," "Transaction Broker," and "No Brokerage."
In Florida, Transaction Broker is the default status (or what an agent is presumed to be unless otherwise stated in writing).
If the licensee has a Single Agent relationship with the seller, the listing agent owes the highest level of fiduciary duties to the seller including loyalty, confidentiality, obedience and full disclosure.
If a seller starts off being represented as a Single Agent and the Agent or Broker wishes to represent both parties, they must transition to Transaction Broker and a new notice must be presented to the seller called, "CONSENT TO TRANSITION TO TRANSACTION BROKER."
The other alternative is that if an agent/broker wishes to keep Single Agent status with the seller and not represent the buyer, they can do so by having a No Brokerage representation with the buyer.
At ALTRU® Realty, we maintain Single Agency status at all times because we believe this is in the best interest of the seller.
For more details:
Florida - Real Estate Agency Relationships
Florida - Real Estate Agency Relationships
Florida - Real Estate Agency Relationships
No Brokerage:
This status is the least representation an agent can offer and the duties include: dealing honestly and fairly, disclosing all known facts that materially affect the value of the residential real property which are not readily observable to the buyer, and accounting for all funds entrusted to the licensee.
This relationship type is commonly used for "limited service" listings or when a Single Agent represents a seller and then a buyer without an agent enters the mix and the agent does not wish to transition to Transaction Broker. In this scenario, the agent can remain Single Agent to the seller and have a No Brokerage relationship with the buyer.
Transaction Broker:
Transaction Broker status applies the basic duties of a No Brokerage relationship and adds the following:
- 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 limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of 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; and
- Any additional duties that are entered into by this or by separate written agreement.
With Transaction Broker status, the agent can manage a transaction in which they offer limited representation to both a seller and a buyer. This may be the biggest unspoken concern of being a seller. Per Florida law, licensees are considered Transaction Brokers by default; FL Statutes-475.278, Section 1/b:
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Presumption of transaction brokerage.—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.
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With regard to "limited confidentiality," the 2017 FL statutes 475.278 state it as such:
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Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of 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.
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Single Agent (ALTRU® Realty chooses this, as opposed to the default, Transaction Broker)
If the licensee has a Single Agent relationship with the seller, the listing agent owes the highest level of fiduciary duties to the seller including loyalty, confidentiality, obedience and full disclosure. Though not the default status, I choose this higher level of representation for my clients because I believe it is what the public deserves when hiring an agent that will earn substantial commissions.
The full list as stated by FL statutes 475.278 includes:
- Dealing honestly and fairly;
- Loyalty;
- Confidentiality;
- Obedience;
- Full disclosure;
- 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; and
- Disclosing all known facts that materially affect the value of residential real property and are not readily observable.
Another important nuance to note is that if one starts out as a Single Agent and then wishes to transition to Transaction Broker, a new disclosure must be presented to the seller and signed. This notice is called, "CONSENT TO TRANSITION TO TRANSACTION BROKER."
As stated by Florida Statutes 475.278 when transitioning from Single Agent to Transaction Broker):
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Limited representation means that a buyer or seller is not responsible for the acts of the licensee. Additionally, parties are giving up their rights to the undivided loyalty of the licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.
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(bold added for emphasis)
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Single Agency In Colorado:
The 3 licensee statuses for Brokers are: "Seller's Agent" "Buyer's Agent," "Transaction-Broker" and "Customer."
If representing the seller, either the Broker represents the seller as a Seller's Agent (then the buyer becomes a Customer) or as a Transaction-Broker (Broker is a transaction-broker assisting in the transaction; Broker is not the agent of Seller).
Under Colorado law, a broker is presumed to be a Transaction-Broker unless a Single Agency relationship is established by a written agreement between the broker and the consumer. A Transaction-Broker assists one or more parties throughout a contemplated real estate transaction with communication, interposition, advisement, negotiation, contract terms and the closing of such real estate transaction without being an agent or advocate for the interests of any particular party to such transaction. Notices should be provided in writing.
A Broker can transition from Agent to Transaction-Broker if agreed upon by both parties with the Change of Status – Transaction-Brokerage Disclosure.
At ALTRU® Realty, we maintain Single Agency status at all times because we believe this is in the best interest of the seller.
For more details:
Colorado - Real Estate Agency Relationships
Colorado - Real Estate Agency Relationships
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Colorado - Real Estate Agency Relationships:
From Colorado Real Estate Commission - DEFINITIONS OF WORKING RELATIONSHIPS
Seller's Agent:
A seller's agent (or listing agent) works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the seller.
The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.
Transaction-Broker:
A transaction-broker assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning a property or a buyer's financial ability to perform the terms of a transaction and, if a residential property, whether the buyer intends to occupy the property. No written agreement is required.
Customer:
A customer is a party to a real estate transaction with whom the broker has no brokerage relationship because such party has not engaged or employed the broker, either as the party's agent or as the party's transaction-broker.
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Additional duties for Broker acting as a Seller's Agent v Transaction-Broker
If a Broker is acting either as an Agent or as a Transaction-Broker in Colorado, there are 17 duties that the broker is responsible to perform. They are called “uniform duties†because all duties are the same for Agency and Transaction-Broker. If the Broker acts as Agent, then the Broker must agree to perform 3 additional duties:
1. Promoting the interests of seller or landlord with the utmost good faith, loyalty and fidelity. 2. Seeking a price and lease rates and terms that are acceptable to seller or landlord. 3. Counseling seller or landlord as to any material benefits or risks of a transaction that are actually known by broker.
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Single Agency In New York:
The 4 licensee status types for the Broker are: "Seller's Agent," "Broker's Agent," "Dual Agent" and "Dual Agent with designated sales agent."
Licensees are required by law and regulation to disclose to consumers what type of agency relationship that licensee is currently acting under. A licensee is required to "make it clear for which party he is acting" but this does not require a licensee to utilize a form to disclose so long as it is communicated diligently to the consumer.
Essentially, if a Broker has a seller's listing, he/she is either acting on behalf of his/her seller as a Seller's Agent or a Dual Agent (if also working for a buyer).
A seller can either give advanced consent to dual agency by indicating so in writing on the "New York State Disclosure Form for Buyer and Seller" or this can be disclosed and consented to at the time the dual agency arises (unrepresented buyer requests showing) by changing agency then.
At ALTRU® Realty, we maintain Single Agency status at all times because we believe this is in the best interest of the seller.
For more details:
New York - Real Estate Agency Relationships
New York - Real Estate Agency Relationships
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New York - Real Estate Agency Relationships:
Throughout the transaction you may receive more than one disclosure form. The law may require each agent assisting in the transaction to present you with this disclosure form.
From the New York State Disclosure Form for Buyer and Seller:
Seller's Agent:
A seller's agent is an agent who is engaged by a seller to represent the seller's interests. The seller's agent does this by securing a buyer for the seller's home at a price and on terms acceptable to the seller. A seller's agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A seller's agent does not represent the interests of the buyer. The obligations of a seller's agent are also subject to any specific provisions set forth in an agreement between the agent and the seller. In dealings with the buyer, a seller's agent should (a) exercise reasonable skill and care in performance of the agent's duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.
Broker's Agents: (this is what the Broker is to the opposite party when engaged)
A broker's agent is an agent that cooperates or is engaged by a listing agent or a buyer's agent (but does not work for the same firm as the listing agent or buyer's agent) to assist the listing agent or buyer's agent in locating a property to sell or buy, respectively, for the listing agent's seller or the buyer agent's buyer. The broker's agent does not have a direct relationship with the buyer or seller and the buyer or seller can not provide instructions or direction directly to the broker's agent. The buyer and the seller therefore do not have vicarious liability for the acts of the broker's agent. The listing agent or buyer's agent do provide direction and instruction to the broker's agent and therefore the listing agent or buyer's agent will have liability for the acts of the broker's agent.
Dual Agent:
A real estate broker may represent both the buyer and seller if both the buyer and seller give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, and the buyer and seller. An agent acting as a dual agent must explain carefully to DOS-1736-a (Rev. 11/10) both the buyer and seller that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation. A seller or buyer may provide advance informed consent to dual agency by indicating the same on this form.
Dual Agent with Designated Sales Agents:
If the buyer and seller provide their informed consent in writing, the principals and the real estate broker who represents both parties as a dual agent may designate a sales agent to represent the buyer and another sales agent to represent the seller to negotiate the purchase and sale of real estate. A sales agent works under the supervision of the real estate broker. With the informed consent of the buyer and the seller in writing, the designated sales agent for the buyer will function as the buyer's agent representing the interests of and advocating on behalf of the buyer and the designated sales agent for the seller will function as the seller's agent representing the interests of and advocating on behalf of the seller in the negotiations between the buyer and seller. A designated sales agent cannot provide the full range of fiduciary duties to the buyer or seller. The designated sales agent must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship with designated sales agents before agreeing to such representation. A seller or buyer may provide advance informed consent to dual agency with designated sales agents by indicating the same on this form.
Buyer's Agent:
A buyer's agent is an agent who is engaged by a buyer to represent the buyer's interests. The buyer's agent does this by negotiating the purchase of a home at a price and on terms acceptable to the buyer. A buyer's agent has, without limitation, the following fiduciary duties to the buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A buyer's agent does not represent the interest of the seller. The obligations of a buyer's agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer. In dealings with the seller, a buyer's agent should (a) exercise reasonable skill and care in performance of the agent's duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the buyer's ability and/or willingness to perform a contract to acquire seller's property that are not inconsistent with the agent's fiduciary duties to the buyer.
Broker/Agent acting as a Seller's Agent v Transaction-Broker
A Seller's Agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A seller's agent does not represent the interests of the buyer.
A designated sales agent cannot provide the full range of fiduciary duties when acting as a Dual Agent.
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How Transaction Broker or Dual Agency status can work against sellers:
This representation status works against sellers in the sense that it naturally places a listing agent at odds with the seller's best interest. Why is the buyer not affected by this same Transaction Broker dilemma? It is because buyers' agents are perfectly aligned with their buyer's needs. In other words, a buyer's agent is naturally coming from a place that will support the buyer's wishes and since the buyer has the control, agents must go along with them. Conversely, a seller is more at the mercy of the advice of their listing agent and the buyer and buyer's agent. They are more vulnerable and are therefore more susceptible to manipulation.
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