Agency

REALTORS® add value to the real estate transaction by representing the interests of their clients. Consumers can choose from a variety of business relationships with real estate professionals, including buyer representation, seller representation or both with full disclosure and informed consent.

The National Association of REALTORS® Code of Ethics requires REALTORS® to disclose whether they represent the buyer, the seller, or both parties. Laws governing the method and timing of the disclosure are different in each state.
NAR supports state laws to clarify the law of agency as applied to real estate brokerage relationships. NAR recommends that state laws clearly define the duties for each type of brokerage relationship.

Under designated agency, a broker may appoint one agent affiliated with that broker to represent the seller and another agent with that same broker to represent the buyer in the same transaction without creating a dual agency relationship.

In dual agency, one agent represents both the buyer and the seller in the same transaction. Dual agency is not allowed in some states, but where permitted, it must be disclosed to both buyer and seller, who must both consent to a dual agency relationship.

NAR does not support the pure nonagency facilitator concept in which a licensee assists the parties to a real estate transaction in reaching an agreement without being an advocate for the interest of either party. In that type of relationship, the licensee owes the consumer none of the traditional fiduciary duties.

REALTORS® work to protect consumers in the real estate transaction, and full and timely agency disclosure is essential for successful consumer relationships.
NAR encourages real estate firms to have a written company policy that addresses brokerage relationships with consumers. That policy should provide brokers and sales associates with guidelines about their duties and obligations to consumers.

NAR also stresses the importance of education and training for real estate professionals on the topic of brokerage relationships with consumers. The association encourages state regulatory bodies to require pre-licensing courses and core continuing education programs to assure that licensees fully understand their state’s agency laws and requirements.

NAR recommends that states adopt laws that mandate agency relationship disclosure and rules to provide meaningful and timely written disclosure.

State laws should specify how brokerage relationships end; describe an agent’s duties upon terminating a client relationship; eliminate or modify the consumer’s vicarious liability for the acts of the agent; describe the disclosure duties of agents with respect to property condition; and, once a statutory framework is in place, replace the state’s common law (case law) if inconsistent.

Information provided by NAR