Definition of "Agency"

Travis Ten Brink real estate agent
Travis Ten Brink, Real Estate Agent Century 21 Professional Realty

The real estate industry bases the agency definition on the relationship between a real estate agent and the client they represent. Agency relationships have a fiduciary element to them that is underlined by law, which impresses a level of trust and confidentiality between the two parties.

The agent’s duties, which can be applied to either broker or salesperson, are defined in real estate practice. Their responsibility is to represent the interest of their clients in a real estate transaction. This relationship is called an agency, and there are two types of agencies.

Express Agency

An agency relationship is considered an expressed agency if the real estate agent and the client have either a written or oral agreement. That agreement announces their expressed desire for this relationship of representation.

Expressed agency in real estate is made through a written listing agreement with a client that wants to sell their property or through a buyer’s agreement with a client that wants to buy a property. Some states accept verbal agreements, but a written agreement carries more weight when it comes to the parties’ responsibilities.

Implied Agency

While most states don’t accept agency without agency agreements, an implied agency does not even have a verbal agreement. An implied agency creates the agency relationship between the agent that takes on responsibilities and provides some level of help to a buyer or seller without having signed an agency agreement. Similarly, a buyer or seller can ask an agent for advice without signing or verbalizing an agency agreement.


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In both these situations, the agency is implied. Some states passed legislation to avoid implied agency without a written agency agreement.

How does the Agency Relationship work?

A proper agency relationship created through a written agency agreement follows the agency law of fiduciary duties. These additional duties can hold an agent responsible and liable if the duties are violated. Based on the type of client they represent, seller or buyer agents are grouped into three types of agencies that follow the fiduciary duties.

Seller Agency

When the agent represents the home seller, the type of relationship is a seller agency. The agent will represent the seller in the real estate transaction and find the property’s best buyer. 

Buyer Agency

When the agent represents the home buyer, the relationship will be a buyer agency. In this scenario, the agent will focus on the buyer in the real estate transaction and browse listings to find the buyer’s best home.

Dual Agency

The dual agency can be represented by one agent representing both parties in a transaction while dealing with the fine line of representing both the buyer and the seller. At the same time itcan mean two agents from the same broker where one agent works with the buyer and the other with the seller.

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