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 a tenant find a rental 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 (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 prospective tenant’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 tenant. 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 tenant AND the landlord in the same transaction. There are specific rules and procedures for this practice, and both the tenant and the landlord 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.
You are entitled to choose your level of representation regarding your search for a rental property:
Exclusive Tenant Representation – This level of representation obligates you to conduct your rental property search with a designated agent. If you rent a property, your agent would usually be compensated by the landlord at execution of the lease. But if compensation is not paid in this manner, you would be obligated to pay the agent as specified in the agreement. In addition, if you found a property to rent on your own or through someone other than your designated agent, you would still be obligated to compensate your contracted agent per the Exclusive Tenant Representation Agreement.
Non-Exclusive Tenant Representation (Recommended) – This level of representation allows you to conduct your rental property search with more than one agent, if desired. The agent that finds the property that you want to rent would be compensated by the landlord, but would represent YOU in the transaction. If you found a rental property on your own, without the use of an agent, you would not be responsible for any compensation. This level of representation is recommended because of its flexibility; giving you more options in the successful search for rental property.
We have included web links below, to allow you to view examples of both agreements. At the time of signing, please make sure you have thoroughly reviewed the agreement of your choice.
TENANT AGENCY REPRESENTATION AGREEMENTS