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Top Ten Things to Know about Tucson Real Estate - Who does my Agent Represent?

May 20, 2007

Agency law can vary widely from state to state. 

It is very important to know IF and HOW your interests are being represented!

Your potential agent is required to discuss agency with you at their first substantial meeting with you.  If your agent hasn’t mentioned how they will be representing you, get out, and fast!  Expect to see a disclosure and to sign your name to it.  Expect your agent to follow the law and to practice good real estate!

Okay, let me step off my soapbox here…

The two major ways to be represented are by a Single Agent or a Dual Agent.

Let’s start with some definitions.

An Agent:

• Is a person who represents someone else, called their client
• Must follow the client’s instructions, unless they violate law
• Has Fiduciary Duties to their client
• Must protect and promote their client’s interests
• Is obligated to deal fairly and honestly with other parties, and must disclose material defects and facts to other parties involved in a transaction 

Fiduciary Duties are:

• Confidentiality, which remains in effect for an indefinite period of time
• Accounting, which doesn’t mean I have to do your taxes.  Agents are accountable to their clients for all monies accepted in the transaction, like your earnest money.
• Reasonable Skill and Care, meaning an agent should be knowledgeable and should perform to the high standards set for the profession
• Loyalty, where a client’s interests are placed before the agent’s interests
• Obedience.  Agents have to obey their clients unless they violate the law. 
• Disclosure.  Agents must make full disclosure to their clients regarding any conflicts of interest, other offers, or material defects, that sort of thing.

There are two major ways you can be represented by a Realtor in Tucson: Single or Dual Agency.

A single agent represents one party: either a Buyer or a Seller, but not both.  The agent has fiduciary duties to their client, and must deal honestly with all other parties.  Example: If you hire Kelley Koehler of Long Realty as your agent to help you buy a home in Tucson, then I represent your interests only, if you want to buy a home listed by Joe Schmoe of Brokerage ABC.  Same deal if Kelley of Long Realty lists your home, and Mary Berry of Brokerage XYZ finds a buyer for us.  I represent only one party.

A dual agent either represents both the Buyer and Seller personally, or both the Buyer and Seller are represented by different agents from the same Brokerage.  There’s two different scenarios here to work through.  Either way, you can only be represented by a Dual Agent with explicit written permission from YOU.

Scenario One: You are looking for a home and call the number on a sign in front of a house that looks good to you.  You aren’t working with any other agent yet, so the agent on the sign agrees to show it to you.  That agent on the sign, at this point, represents the Seller Only.  We call them the Listing Agent. 

You decide this is the house you want, and ask the Listing Agent to represent you and write an offer with you.  Now, that agent must ask if you will accept Dual Agency.  If you agree, then you are now represented by a Limited Dual Agent.  This means that the Agent can’t tell the Seller that you’d accept a higher purchase price, just as the agent can’t tell you what she thinks the Seller would accept.  The agent may encounter conflicts with their duties of obedience, loyalty, disclosure, and confidentiality, but must still disclose all known defects.

Scenario Two: You’ve hired a Long Realty agent from the Central office to sell your house, we’ll call her Kelley.  Another Long Realty agent, Ben, who works out of the Casas Adobes office, has a buyer for your house and his client submits an offer.  Now, I don’t know Ben, but we work for the same company.  Technically, we are both Limited Dual Agents.  In this scenario, I probably don’t know any confidential information about the Buyer, but if Ben were to slip and tell me something confidential about his Buyer, I can’t relay that information to you.  The same rules from Scenario One apply.

Here’s the kicker: Long Realty is a huge company that dominates the market in Southern Arizona.  If you don’t agree to limited dual agency, I can’t show you any properties that are listed by Long Realty, which is roughly 40% of all the houses listed in this town.  If you have concerns about dual agency, talk to your agent about it.  It’s good to have questions and concerns, be sure you get them answered, so that you’re comfortable that your agent is representing your best interests.

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