(Feb. 14, 2020) There are three kinds of agency relationships in Maryland: seller agency, buyer agency and dual agency.
When working with buyers, real estate agents must handle buyers as either a customer or a client, and the difference is:
• A client is a buyer or seller who has entered into a written agency agreement and is represented by an agent. The agent provides advice and also owes the client duties of reasonable care, loyalty, disclosure, confidentiality, diligence and accounting.
• A customer is a buyer or seller who has not entered into a written agency agreement and is not represented by an agent. A customer must be treated honestly and fairly and agents must disclose material adverse facts known to the agent.
Seller agency is the “traditional” agency relationship where the listing agent represents the seller under a written listing agreement and owes the seller duties of reasonable care, loyalty, disclosure, confidentiality, diligence and accounting.
Subagency is another type of seller agency where the seller authorizes the listing company to allow real estate agents from other companies to show the home to buyer customers, or buyers who have not entered into a written buyer agency agreement.
So, simply put, if you are a buyer and you do not enter into a written buyer agency agreement with your real estate agent, he/she is working as a subagent. And, in this scenario, the listing agent and subagent both represent the seller, while the buyer remains unrepresented.
As specified above, buyer agency is created through a written buyer representation agreement, and the buyer agent owes the buyer the duties of reasonable care, loyalty, disclosure, confidentiality, diligence and accounting.
Additionally, the buyer agent should disclose any material facts or information about the property, which are reasonably known to the buyer agent.
Dual agency is a relationship in which the real estate broker or the broker’s designee (the “dual agent”) assigns one real estate agent affiliated with the broker to represent the seller (the seller’s “intra-company agent”) and another agent affiliated with the broker to represent the buyer (the buyer’s “intra-company agent”).
Intra-company agents are required to provide the same services to their clients that agents provide in transactions not involving dual agency, including advising their clients as to price and negotiation strategy.
— Lauren Bunting is a licensed Associate Broker with Bunting Realty, Inc. in Berlin.