Agency Relationship
The term "agent" refers to a person who acts on behalf of another. The person for whom the agent acts is called a "principal." Thus, when you hire a real estate "agent," you hire that person to act on your behalf in buying or selling your home; you are the "principal." The law requires the agent to be loyal to the principal and to act in the principal's best interest.
In some instances, an agent may be acting on behalf of two different principals -- a "dual agent." When acting as a dual agent, the agent must be aware of his or her responsibility to each principal.
Traditionally, and still the case in some states, agents work only for the seller. In those states, the “buyer’s agent” is not really working for the buyer at all. Rather, both the buyer’s agent and the seller’s agent actually work for, and have a duty to, the seller.
Many states allow a real estate agent to act as a dual agent. Thus, your real estate agent may be representing both the buyer and the seller. A buyer and a seller have conflicting interests – the buyer wants the lowest price, while the seller wants the highest. Nonetheless, these states permit agents to represent both parties. Usually, the agents are required to disclose exactly who they represent.
Regardless, when you buy or sell FSBO, you don’t need to worry about whether or not your agent really is totally committed to your interests only.
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