By Sammy Gardner


It is important for buyer's and seller's in Texas to understand exactly who the real estate sales people in a transaction represent.  As required by law, your salesperson should explan to you what type of agency relationship you have with him or her as well as with the brokerage company he or she represents.  Below is a discussion of the various types of agency relationships.  However, you should keep in mind that we do not practice all of these types of relationships in Texas.

It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company. Discussed below are all forms of agency relationships, but in Texas we do not practice all of these types of relationships.

1. Seller’s Representation (also known as a listing agent or seller’s agent) – A seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. (Buyers who call the agent to see the home need to understand they have no representation.) The agency relationship usually is created by a listing contract.
2. Subagent – In Texas, we usually do not practice subagency. A subagent owes the same fiduciary duties to the agent’s principal as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer’s representative or operating in a nonagency relationship, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.
3. Buyer’s Representative (also known as a buyer’s agent) – A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer’s rep works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s rep may be paid by the seller or by a commission split with the listing broker.
4. Disclosed dual agentThere is no dual agency in Texas. We have Intermediary in Texas. Dual Agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all tof the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent. In many states, this consent must be in writing. Intermediary in Texas must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states. Because of differing Errors and Emissions Insurance, some brokerage firms refrain from Intermediary Services. The Frisco Home Center agenets can all perform Intermediary.
5. Designated agent (also called, among other things, appointed agency) – This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
6. Nonagency relationship (called, among other things, a transaction broker or facilitator) – Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of agency relationship. We do not practice this in Texas. A Realtor in Texas either represents the buyer, the seller, or is in an Intermediary Relationship.

Information About Brokerage Services in Texas

Reprinted from REALTOR Magazine Online by permission of the National Association of Realtors, Copyriht 2005, All rights reserved.

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