In a nutshell an Agent walks in the shoes of the Client. The Client's best interests must, by the Common Law of Agency, come before the interests of the Agent. For Example: an attorney can not represent 2 or more parties - that's why a law firm must do a "conflict check" before learning the reason why you are visiting that law firm; by their Code of Ethics, an attorney can not even give the appearance of a conflict of interest.

Now let's take that concept into the real estate industry. A Buyer's Agent must:

1. be licensed with the regulatory department of the State in which the licensee practices;
2. must establish the relationship between the Buyer and the Brokerage through a written agreement between them;
3. give the Buyer 100% loyalty and 100% confidentiality;
4. the BrokerAGE is the Agent, not the associate of the firm.

The marketplace has dramatically changed since the concept of Buyer's Agency became legal for the transfer of residential real estate.

In the beginning a small group of licensed real estate professionals established the principles and practices of representing only buyers in the purchase of real property and they called themselves: "Exclusive Buyer's Agents". They take no listings and therefore have no conflict of interests. They do not work for the Seller and are not paid by the listing Brokerage, because that would cause conflicts of interest. This concept was a threat to the traditional Brokerages because they had always controlled the listing and the disbursement of commissions.

However, as the concept of Exclusive Buyer's Agents grew and became desired and accepted by Buyers, the traditional Brokerages began to muddy the waters. They feared the loss of the "double dip" of collecting the commissions from both sides: the seller and the buyer. Additionally, some traditional Brokerages offer associates a bonus for SELLing an in-house listing. You see they are in the business of SELLING products.

The associate learns the secret motivations of the Seller and lists the property in their own firm's data base. Then the property is listed in the Multiple Listing Service (MLS), which is a membership of Brokerages who agree to "co-operate" in getting the property sold. It may not be an agreement for compensation to the Brokerage that brings the Buyer. Why? Because the Listing Contract between the Seller and the Selling (Listing) Brokerage is a private contract and all commission money goes to the Selling (Listing) Brokerage.

The Agent is the firm! Be it a law firm or a real estate brokerAGE. The traditional real estate brokerAGE firms realized the legal implications of the term "Agent" and have since chosen to use other words to describe or not describe their product(s), i.e.: ______ Properties Inc.; _____ Residential Real Estate Co, Inc., etc.

As the threat of losing the "double-dip" of commissions became realized by the traditional brokerages, they re-trenched their marketing and began to appeal to the uneducated Seller and uneducated Buyer. They relied on the emotional and financial needs of the Seller and the Buyer by telling each: "You can trust me." They did not push the brokerage's and individual associate's need for both commissions.

Thus came new terminology in the real estate industry. Traditional brokerages, using much money, began to change the Common Law of Agency through the state's legislative process; trade associations and their own marketing endeavors.

Wordsmithing of various and new real estate relationships went on the fast track:

Single Agent:

Represents a Seller OR a Buyer, but never both.

Client + Licensee = Agent

Exclusive Buyer's Agent

a form of Single Agent. The true purpose is full 100% loyalty and 100% confidentiality and putting the best interests of the Buyer before the Agent. Can give "advice & counsel". The National Association of REALTORS describes this relationship much differently because they feel they have to protect the majority of their member's ability to obtain the "double-dip".

Dual Agent

some state have outlawed it (finally realizing that no Agent can represent 2 disinterested parties - Seller and Buyer)

Buyer's Agent

a licensee can represent a Buyer, but not for that firm's listing.

Transactional Broker Notification

born in Colorado which gave each licensed salesperson 3 years to get a Broker's license. Notification to the Seller and/or Buyer that the Broker will only facilitate the transaction, for a commission. Usually from both Seller & Buyer for transfer of the same property.

Customer + Licensee = Be Aware!

Designated Agent

the Broker of the firm is the "Agent" and "Designates" an associate of the firm to "represent" the Seller and Designates" another associate of the same firm to "represent" the Buyer. (Realty is: gossip between associates; weekly office meetings; overheard telephone conversations; listing files; buyer's files; imputed knowledge) This has not been tested in the Courts.

Buyer's Representative

Note the word "Agent" is missing. Are the duties of an Agent missing, too?

Transition to Transactional

The Seller and/or the Buyer gives permission to the brokerage through the licensee to change from a Single Agent relationship to the Transactional Broker Notification relationship.

Above are types of relationships that exist and are established in writing between:

1. the BrokerAGE and the Seller through the employment Contract/Agreement to list the property "For Sale" to get it SOLD, and;
2. the BrokerAGE and the Buyer through the employment Contract/Agreement to procure the property for the Buyer to BUY.