Real estate investment is a very lucrative business; so many people are being attracted towards it. However many such people are laymen and not well versed with the different terms associated with the real estate business. It is important that one understands the basics of a business before entering it. Since real estate agents form a vital part of the real estate business it would be very helpful some basic stuff related to them.
There are three types of agents:-
- Seller’s Agent: The agent who represents the seller. Seller’s agent is also called a listing agent.
- Buyer’s Agent: The agent who represents the buyer,
- Dual Agent: The agent who represents both the buyer as well as the seller for a particular transaction is called a dual agent.
Real estate agents have to work in compliance with several laws. For example, in California it is mandatory for an agent to have a valid license, for presenting an agency disclosure form to the various potential clients. The real estate office is called a brokerage and the agent is called a broker. The Principal in a real estate business can be the buyer, seller or even both. Quite frequently, there are other brokers who are also involved in the same deal. They are called associate licensees. However, the chief broker is always the main agent in the said deal. The main broker is the one who is responsible for the actions of associate licensees.
Regarding Dual Agency, as long as it is completely transparent, it is regarded as lawful in every state. One of the pros associated with a dual agency is that one can expect a smoother transaction. This is because only one mediator is involved in almost all transactions. The process becomes much more transparent and smooth. There are disadvantages as well the basic one being that the purchaser is not as well represented as the seller. Though the agency always has a proper contract with the seller the same is not the case with the buyer.
Secrets of the buyers and sellers: There is also an apparent conflict of interest in a Dual Agency. Most of the Dual Agencies however act in a specialized manner and serve the needs of both parties. The Dual agent cannot reveal to the buyer that the seller is willing to sell his properties at a lesser price, than what is mentioned in the catalog. There are no written consents from the seller. Neither the agent can reveal to the seller that the buyer is willing to buy the property at a higher price, than what is mentioned in the catalog. The agent therefore has access to the secrets of both the parties. It is his/her discretion to keep the secrets and not reveal it to the buyer or seller.
Real Estate Agents
