Agency is one of the most important duties of a real estate agent. A licensed real estate agent has a specific, legal responsibility to his or her client; called a fiduciary duty. This simply means that the agent must always act in the best interests of his/her client. A licensed real estate agent is obligated to help an owner sell a property while performing the following fiduciary duties:
Loyalty – Doing everything possible, within the law, to gain an advantage for their client
Obedience – Promptly obeying all lawful instructions from the client, conforming to the purpose of the agency relationship
Disclosure – Revealing any material defects in the property to potential buyers (Does not include non-material information such as: poor school system rating, declining property values, traffic problems, etc.)
Confidentiality – Using discretion when revealing or concealing financial details; without jeopardizing the seller’s negotiating position
Accountability – Being accountable for any documents or money entrusted to the agent
Care and Diligence – Through education, continually refine his or her skills to competently represent the seller. A good real estate agent will keep up with current market activity and assist their clients with contracts, negotiations, inspections, as well as the closing process.
The practice of Dual Agency occurs when the real estate agent represents the buyer AND the seller in the same transaction. There are specific rules and procedures for this practice, and both the buyer and the seller have to agree to it, in writing. Dual Agency is a double-edged sword. Effectively representing both parties in a transaction is difficult, if not impossible. In fact, 65% of the claims filed with Errors and Omissions insurance are due to mishandled Dual Agency transactions.
Even though the State of Illinois allows this, and the majority of real estate companies participate in the practice of Dual Agency; Select A Fee Real Estate does not believe in this practice, and will only represent one party in a transaction! Our company policy dictates that we never participate in Dual Agency. You are assured that you receive only the best service, council, and advice, for your situation.
There are two types of listings:
‘Exclusive Right to Sell’ – This is the most common listing agreement used by traditional real estate brokers. This agreement requires the seller to not only pay a commission if their property is sold through their listing broker or another MLS broker (buyer’s broker), but also if the seller finds their own buyer! In an ‘Exclusive Right to Sell’ listing, the listing broker gets the commission specified in the listing agreement regardless of who actually finds the buyer.
‘Exclusive Agency’ (Recommended) – This type of listing agreement allows the seller to market their property “By Owner” and pay zero commission if they are successful in finding their own buyer. It is this ‘Exclusive Agency’ listing agreement that forms the basis for many Flat Fee service providers’ listing agreements. If you found a buyer for your property on your own, without the use of an agent, you would not be responsible to pay a commission. This level of representation is recommended because of its flexibility; giving you more options in the successful search for a buyer for your property.