What does the term real estate "agent" mean to you? Does it denote the individual who shows you homes for sale, the person who lists your property, or is there a deeper meaning to the word?

Consider the word "agency". Agency denotes a relationship existing between two individuals, a "principal" and an "agent". In an "agency" relationship, a "principal" (traditionally the seller) employs an "agent" to represent the seller's interests. The other party to a real estate transaction (usually the buyer) must be treated honestly and fairly.

The agent acts in the principal's best interests, and has a fiduciary or trust relationship with the principal. this means the agent is obligated to keep the seller informed about all aspects of the transaction, including information about the buyer vital to the seller's decision.

Can buyers also be represented in any agency relatinship? Yes. In recent years, real estate agents have begun representing buyers. Buyers employ the "agent", becoming the agent's "principal". The agent has a fiduciary obligation to the buyers, and has an obligation to uncover all the facts about properties shown. In this situation, the agent represents the best interests of the buyers.

To learn more about the concept of "agency", ask a real estate professional for a thorough explanation. It's important to know "who represents whom".