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What is Seller Agency?

In a few pages we cannot to explain you all the terms, nuances and specific regulations related to seller agency as it pertains to every state. For that reason you should at all times contact your local real estate professional and/or seller’s agent for clarification and more detail. Below is a summary of useful information regarding seller agency that you may find helpful to navigate you through the home selling process. The information is categorized as follows:

· Terms Related to Seller Agency

· Types of Agency

· Seller Agent's Obligations to Client

· Termination of a Seller Agency

1. Terms Relative to Seller Agency

Real estate broker - Any person who for fee, commission or other valuable consideration, or with the intention or with the expectation of upon the promise of receiving or collecting a fee, commission or other valuable consideration, does any of the following:- sell, exchange, purchases, rents or leases, or negotiates, or offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of any real estate, or lists or offers, attempts or agrees to list any real estate, or buys or offers to buy, sells or offers to sell or otherwise deals in options on real estate, or advertises or holds himself out as engaged in the business of selling, exchanging, purchasing, renting or leasing real estate, or assists or directs in the procuring of prospects or the negotiation or completion of any agreement or transaction which results or is intended to result in the sale, exchange, purchase, leasing or renting of any real estate.
Real estate agent – Often referred to as a real estate salesperson. A generic term pointing to a person licensed by a state who holds either a real estate broker or real estate salesperson license who assists people to buy, sell, rent or lease, exchange, manage, manage community associations, or auction real estate for some type of expected/anticipated compensation.
Listing - A contract by which a party employs a licensed real estate broker to assist them in a real estate transaction referring to the sale and marketing of real property.
Listing contract
- a. An employment contract between an owner and a licensed real estate broker entered into for the purpose of the broker providing services to find a ready, willing and able person to buy, rent or lease a particular property under the terms specified in the contract for an identified period of time and where the owner agrees to pay certain identified compensation. In addition, it usually authorizes the broker to be the agent of the owner/principal and to perform services for the principal in a fiduciary capacity involving the principal's identified property.

b. The employment of a licensed real estate broker by a prospective purchaser or lessee to locate property to purchase or lease can also broadly be considered a type of listing.

Client - Also referred to as a principal. A person who employs another to act as his or her representative or Agent. Client relationship in many states equal fiduciary relationship.
Principal - Also referred to as a client. Commonly known as person who engages an agent for representation.
Agent - One who has been authorized to act for a party known as the principal/client.
Agency - An expressed contractual relationship which can be created in writing or orally in which a principal authorizes and empowers the agent to act on behalf of the principal in dealing with third parties and further agrees to accept full liability for the agents acts.
Agency disclosure - A written declaration often signed by a prospective buyer or seller informing that party of the role that the broker is playing in a specific transaction. The purpose of disclosure is to explain whether the broker represents the buyer or seller or is a dual agent (representing both) or a subagent (an agent of the seller's broker). This allows the customer to understand to which party the broker owes certain agency duties.
Seller's Agent - Also referred to as the Listing Agent. The real estate agent/broker who has obtained a signed listing contract from an owner/seller.
Purchase and Sale Agreement (Agreement of Sale) - A written agreement or contract between a buyer and a seller in which they reach a "meeting of minds" whereby the purchaser agrees to buy specific real estate and the seller agrees to sell upon specific terms and conditions set forth in the contract.
Buyer's Agent - Also referred to as the Selling Agent. Do not confuse a selling agent with the seller's agent. A real estate broker or salesperson that represents a prospective purchaser or tenant in a real estate transaction and who owes the buyer/tenant/principal common-law or statutory agency duties.
Buyer-agency agreement - A principal-agent relationship in which the broker is the agent for the buyer and owing fiduciary responsibilities to the buyer/principal under the law of agency.
Dual Agent - A real estate licensee who represents both parties a real estate transaction as an agent. When the dual agency is disclosed it can be legal in many states but when is has not been disclosed, it is illegal in all states. (Note: Many states/brokers no longer allow/offer dual agency as an agency option.)

2. Types of Agency

Seller Agency - Real estate agent who represents a seller in a real estate transaction as a client and who treats buyers as customers.
Sub Agency - A situation where a seller client expressly or implicitly authorizes the real estate broker to share the listing with other real estate brokers to help market the seller's property and where they also act as an agent for the seller. (While this type of agency relationship still exists in many states, many brokers have opted no longer to allow sub agency.)
Buyer Agency - Real estate agent who represents a buyer in a real estate transaction as a client and treats sellers as customers.
Exclusive Agency - Real estate agent who represents a client as his or her agent for a specified time period.
Exclusive Right to Represent - Agreement between a seller or a buyer client and a broker granting the broker the exclusive right to represent the seller or the buyer client as an agent. Agent is entitled to compensation regardless of who completes transaction during the period of agreement.
Single Agency - Real estate agent who represents either the buyer or the seller as a client in a real estate transaction and never both.
Dual Agency - A real estate broker or licensee who represents both the seller and the buyer in a real estate transaction and where full fiduciary duties cannot be fulfilled to either. When it has the informed consent of both the buyer and the seller is know as disclosed dual agent and is legal in many states but without informed consent (meaning the consumer understands this type of agency relationship), it is illegal in all states.

3. Seller Agent's Obligations to the Client

Loyalty - The Seller's Agent must always act in best interest of client and never in the their own best.
Obedience - The Seller's Agent must carry out all lawful instructions of client.
Disclosure - of all material facts which would have an affect on the decision making process.
Accountability - The Seller's Agent must protect and account for all money, documents, valuables or other personal property given to him/her by or on behalf of the Seller.
Confidentiality - Duty to keep the client's information and/or discussions confidential and which survives the termination of the agency relationship. Duty does not apply to legally required disclosures involving known physical or hazardous conditions of property.
Reasonable Skill, Care and Due Diligence - The Seller's Agent must act in a reasonably capable and competent manner in performing the duties and requirements of a licensee.

4. Termination of a Seller Agency Relationship

Completion or performance under the agreement.
Death or insanity of agent or client/principal.
Expiration of agreement.
Mutual agreement to terminate or rescission.
Impossibility of performance (for example the destruction of the property)
Incapacity (for example mentally incapable) or bankruptcy of a principal.
Renunciation - Either client/principal or agent withdraws consent. The court may deem this a breach of fiduciary obligation. The breaching party may be held liable for damages.