The term “agency” is used in real estate to help determine what legal responsibilities your real estate professional owes to you and other parties in the transaction.

Seller’s Representative
The seller’s representative (also known as a listing agent or seller’s agent) is hired by and represents the seller. All fiduciary duties are owed to the seller, meaning this person’s job is to get the best price and terms for the seller. The agency relationship usually is created by a signed listing contract.

Buyer’s Representative
The buyer’s representative (also known as a buyer’s agent) is hired by prospective buyers to and works in the buyer’s best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer’s rep may be paid by the seller or through a commission split with the seller’s agent.

Subagent
A subagent owes the same fiduciary duties to the agent’s customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. The subagent works with the buyer to show the property 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.

Disclosed Dual Agent
A disclosed dual agent represents both the buyer and the seller in the same real estate transaction. In such relationships, dual agents owe limited fiduciary duties to both buyer and seller clients. Because of the potential for conflicts of interest in a dual-agency relationship, all parties must give their informed consent. Disclosed dual agency is legal in most states, but often requires written consent from all parties.

Designated Agent
Designated agents (also called appointed agents) are chosen by a managing broker to act as an exclusive agent of the seller or buyer. This allows the brokerage to avoid problems arising from dual-agency relationships for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties.

Non-Agency Relationships
A transaction broker (sometimes referred to as a facilitator) is permitted in states where non-agency relationships are allowed. These relationships vary considerably from state to state. Generally, the duties owed to the consumer in a non-agency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

Buyer’s Brokerage Agreement
As of July 1, 2012, it is now the law in Virginia that written agreements must be in place for many services to be provided by a real estate agent, similar to how it is with many other types of professional business relationships. The purpose is to ensure the obligations of the agent and the buyer are in clear and understandable terms.

So, why do you have to sign brokerage agreement? The short answer is that Virginia law requires it in order to protect you. The longer answer is that having something in writing — whether it covers a single property or a months-long relationship — ensures that both you and your Realtor® understand exactly what’s expected from each other.

Nothing requires you to have a long-term agreement with a brokerage, as you can enter into a short-term agreement in which the agent will represent you only if you buy a specific property. The written agreement is negotiable, and it must include a list of services the agent will provide, a schedule of fees and a termination date.

Be sure to discuss your options with your Realtor®, and make sure all your questions are answered.