Agents, Brokers, And Agency

A real estate agent is licensed by the state to represent a homebuyer or a seller in a real estate transaction in exchange for a commission. Most agents work for a real estate broker, who also is licensed by the state to represent homebuyers and sellers in a real estate transaction. However, the broker usually must have more education and experience than agents and must adhere to stricter business licensing codes. The broker runs the office and is responsible for all of the listings and other financial details and processes involved with the real estate transaction.

Real estate agents and brokers follow agency rules that dictate their fiduciary duties to clients. Agency laws and regulations vary from state to state, but they tend to share some basic principles: Agents are obligated to act in the best interest of the client, adhere to certain confidentiality clauses, and reveal all known material facts relevant to the transaction.

Agency can be further broken out into three basic categories: seller’s agency, buyer’s agency and dual agency.