The words “real estate agency,” although they are used by most people to refer to an actual building, housing the offices of those who facilitate real estate sales, are much more than that. The law regulating those whose business it is to facilitate real estate sales is known as the Law of Agency, and it clearly establishes the proper conduct of the relationship between those who have real property and those whom they choose to represent them should they choose to sell it.

The most common form of relationship is between the owners of a property and the real estate agency to which they go to help them find a buyer for that property. They are, for the term of the contract, employing that real estate agency, and that real estate agency and its agents are all legally bound to protect the property owners’ interests. All their actions on behalf of the owners must be conducted in good faith but the owners must also deal in good faith with the real estate agency.

The Types Of Contracts

There are three types of dealings possible between a real estate agency and its clients. In the first, the real estate agency works exclusively for the seller; in the second, the real estate agency works only for the buyer; and in the third, the real estate agency acts as a “disclosed limited agent.”

A real estate agency acting as a disclosed limited agent will represent both the seller and buyer; or all buyers who wish to purchase a single property. A real estate agency can act as a disclosed limited agent only with the written consent of all the parties involved, and the relationships among all the parties and the real estate agency must be made clear to each before a proposal can be entertained.

The Duties To A Client

The real estate [] agency representing the seller is obliged to make an ongoing good faith effort to locate a qualified buyer; the agency representing a buyer is obliged to make ongoing good faith efforts to locate acceptable properties at the best prices; and the agencies for both parties are required to safeguard confidential information about the sellers and buyers, even when their contracts have expired.

If clients have questions which are beyond the scope of the real estate agency, the agency should refer them to the appropriate expert, and if the real estate agency is in possession of any material information not easily available to either party which might affect their decision concerning the property, the agency is obliged to reveal it.