What You Will Learn
- The legal real estate agency definition and how it protects your money.
- The critical difference between a client vs customer.
- How real estate brokerage relationships work in practice.
- Why signing a representation agreement is smarter than going solo.
An agency relationship in real estate is a fiduciary agreement under which an agent legally acts on behalf of a principal in property transactions. It is more than showing houses; it is also who has your back legally and financially.
Real Estate Agency Defined
What is agency in real estate? It is the relationship between a real estate licensee and the person they represent. This relationship authorizes the agent to act on behalf of the client, adhering to strict fiduciary duties in real estate such as loyalty, confidentiality, and full disclosure.
| Client (Principal) Someone who has signed an agency agreement. The agent owes them fiduciary duties and advice. |
Customer Someone involved in the transaction (e.g., at an open house) but not represented. The agent owes them only honesty and fairness, not advice. |
Understanding this concept is crucial because it dictates who real estate brokers represent. This relationship is typically established through a written agency agreement. Without this, you are likely just a customer.
If you are new to the basics, here is what a real estate listing is and how the agreement typically starts the agency relationship. Whether you are selling property or looking to rent real estate, clarity is key.
Types of Real Estate Agency Relationships
Not all agents play the same role. Use the search bar below to filter the types.
| Agency Type | Who They Represent | Key Responsibility |
|---|---|---|
| Single Agency | Buyer OR Seller | Total advocacy for one side. |
| Dual Agency | Both Buyer & Seller | Neutral facilitation; limited advocacy. |
| Designated Agency | One party (Same Firm) | Two agents from one brokerage represent opposing sides. |
| Transaction Broker | Neither (Neutral) | Facilitator only; no fiduciary duty. |
Buyer’s Agent vs Listing Agent
A buyer’s agent represents the buyer. They help find properties, negotiate deals, and guide buyers through the purchasing process. Learn more about how buyers agents get paid in real estate.
A listing agent (or seller’s agent) represents the seller. They help market the property and negotiate deals to get the highest price. This relationship is often defined by an exclusive agents in real estate agreement.
Universal Agents & General Agents
While less common in residential real estate sales, universal agents have broad power to act for a principal (like a power of attorney) to conduct financial transactions. A property manager acts as a general agent for a real estate investor, managing ongoing business.
🧭 Quiz: What Type of Agency Is Right for You?
Disclaimer: This quiz is for informational purposes only. Always check with a local real estate professional to understand your specific state laws.
Duties & Fiduciary Responsibilities
When you hire an agent, they owe you specific obligations. These are often remembered by the acronym OLD CAR:
- Obedience: Following legal instructions.
- Loyalty: Putting your interests above their own.
- Disclosure: Revealing all material facts.
- Confidentiality: Keeping your secrets safe.
- Accounting: Safeguarding money.
- Reasonable Care: Using professional skill.
Learn more about fiduciary duties to understand your rights.
Is Dual Agency Legal in Kansas?
In Kansas, dual agency is generally replaced by Transaction Brokerage unless specific designated agency consents are signed. A transaction broker assists both the buyer and seller but does not represent either as an advocate. This is the default role in many Kansas transactions involving the same real estate brokerage if no agency agreement is signed.
Always review the transaction broker addendum form in Kansas or check with the Kansas Real Estate Commission for the latest regulations. In cities like Overland Park or throughout Johnson County, understanding this distinction is vital.
Pros & Cons: Why Representation Matters
Having representation in a real estate transaction protects your best interests. Access to multiple listing services is just the beginning.
For Buyers
Without an agent, you are unrepresented against a professional listing agent. Start with the dos and don’ts when buying a home.
For Sellers
A seller’s agent navigates contracts and inspections. If you’re a seller, walk through these 10 steps to selling your home with your agent.
FAQs About Real Estate Agency
Yes, this is called dual agency. It creates a conflict of interest because the agent represents both the buyer and seller. Many experts recommend avoiding it.
To have an agent represent you as a client (fiduciary), yes. Without a signed agreement, you may just be a customer with fewer legal protections.
Need Help Understanding Your Agency Rights?
Don’t navigate the complex world of agency alone. Whether you are buying or selling, knowing who is on your side is the first step to a successful deal.
If you’re a seller looking for clear representation, explore our listing agent services in the Kansas City metro area. If you need an Overland Park KS real estate agent who explains agency clearly, reach out to Joe.
Download: Get Your Free Agency Cheat Sheet (PDF)
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