Your Local Real Estate Expert

It’s important that a Buyer or Seller understand what legal responsibilities their real estate salesperson has to them and to other parties in the transactions. Ask me to explain what type of agency relationship you have with the my real estate brokerage company and myself. In a nut shell, below are brief explanations of the types of Agency (Representation) a consumer in Arizona can expect. 

1. Seller's representative (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. The agency relationship usually is created by a listing contract.

2. 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. Most commonly, the buyers agent is paid by a commission split with the listing broker that is offered through the local multiple listing service (MLS). However, the buyer can pay the licensee's brokerage directly through a negotiated fee, or the buyer's agent's firm may be paid by the seller or seller's brokerage firm.

3. Disclosed dual agent. 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 of 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 Arizona, this consent 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 Arizona.

4. Subagent. 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. This type of agency is rarely used in Arizona.