Whom Do Real Estate Agents Represent?

In North Carolina, a real estate agent can represent either the seller or the buyer as a single agent OR can represent both the buyer and the seller as a dual agent (with the written permission of both the buyer and the seller).

If you’re not familiar with the concept of a real estate agent ‘representing’ someone, then it may be easiest for you to think of a similar concept with which you probably are familiar: the attorney-client relationship. An attorney’s ethical duty is to represent the best interest of his/her client. Real estate agents, of course, are not attorneys, but they have a similar ethical duty to represent the interest of their clients.

If a real estate agent lists a property for sale, the owner of that property is the agent’s client. Therefore, the real estate agent is ethically bound to pursue the best interest of the owner. Primary among the agent’s duties will be to sell the property for as high a price as possible as quickly as possible.

If the real estate agent represents a purchaser as a buyer’s agent, the real estate agent has an ethical duty to pursue the best interest of the purchaser. Primary among the buyer’s agent’s duties will be to help the buyer obtain the lowest price and best terms for the purchase.

In looking for property and purchasing property, it is your choice whether the real estate agent will represent your interest as a buyer’s agent or whether the real estate agent will represent the seller’s interest as a seller’s subagent. To put this another way, it is entirely your choice whether you wish the real estate agent to work with you as:

In either case, the real estate agent must be honest and use reasonable skill, care, and diligence in helping you find and purchase property; while informing you about the property, including telling you of any ’material facts’ that might influence your decision to purchase; and helping you with an offer to purchase.

These concepts can be confusing if they are new to you. Be sure to ask as many questions as necessary, until you understand the difference. Make an informed decision, as your choice can influence the price you pay for your property and other terms of the sale.

This table may help you understand the differences:

**In our area, virtually all sellers agree to pay the commission for a buyer’s agent. However, it is possible a seller will not agree, and in that case, you will be obligated to pay the agent’s commission. Your real estate agent will know of any properties you are considering for which the seller has refused to pay a commission to a buyer’s agent.

Be a wise consumer: If you chose for your realtor to be a seller’s subagent, don’t tell the agent anything you wouldn’t want the seller to know!

If you prefer the real estate agent to represent you as a seller’s subagent, the agent will ask you to sign a disclosure. The disclosure is not a contract. Rather, it is a consumer protection measure designed to ensure that you understand the agent represents the interest of the seller. In this situation, it is very important you do not tell the agent anything that you would not want a seller to know. Remember, the seller’s subagent is ethically obligated to represent the seller’s interest, and thus is ethically obligated to tell the seller anything you might say that would help the seller get a higher sale’s price or better terms. For instance, if you urgently need to purchase a property, it wouldn’t be in your best interest to tell that to a seller’s subagent who would be obligated to pass it on to the seller.

If you prefer the real estate agent to represent you as a buyer’s agent, you and the agent will sign a contract. There are a number of negotiable terms the agent will explain to you, and which you can decide upon. The contract may obligate you to pay the agent a commission even if you do not purchase property through the agent. Generally speaking, a buyer’s agency assures the real estate agency you will purchase property through him/her and assures you the agent will protect your interest through the sale.

When you and I begin talking about your needs in purchasing property, I will ask you whether you choose to have me represent you as a buyer’s agent or as a seller’s subagent. Remember, it is entirely your decision.

If you choose for me to represent you as a buyers’ agent AND you decide to look at or purchase a property I have listed, I will represent both you and the seller directly as a dual agent. In this case, I can not advise either you or the seller on price or terms, nor can I disclose anything personal about either of you to the other party.

For a more detailed explanation, here is a link to a document prepared by the North Carolina Real Estate Commission, entitled “Working with Real Estate Agents.”