Agency is a legal relationship between a principal (client) and an agent
(the broker and salesperson) that arises when the principal delegates authority
to the agent to perform acts on the principal's behalf and the agent consents
to the delegation. In general, an agency agreement should be in the form
of a written contract, but
this isn't essential unless it is required by state law.
--Adapted from the Don't Risk It: A Broker's Guide to Risk Management, 2nd Edition, published by the NATIONAL ASSOCIATION OF REALTORS®.
Here's the WV law on Agency:
A broker or salesperson shall promptly, or at least prior to any purchaser signing a written offer to purchase, disclose in writing to all parties to a real estate transaction, on a form promulgated by
the commission, whether the broker or salesperson represents the seller, the buyer, or both.
Types of Agency-Brokerage Relationships with Consumers
Also known as a listing agent, a seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is evidenced by a listing contract. Once a property is listed, the seller's agent either can attempt to sell it or, in addition, may offer to cooperate with another licensee who will attempt to find a suitable buyer for the property, A seller's agent negotiates the best possible price and terms for the seller. The agent represents the seller's best interest throughout the transaction. A listing agent can also represent the buyer's interests if working as a Dual Agent. See below.
A real estate licensee is hired by a prospective buyer as an agent to find an acceptable property for purchase and to negotiate the best possible price and terms for the buyer. The agent represents the buyer's best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer's agent may be paid by the seller or a commission split with the listing agent (most common).
Buyer agency is only rarely offered in this area of WV. Some brokers do not cooperate with it or offer the buyer's agent a lesser commission when operating as a buyer agent. The listing agents cannot offer buyer agency services as they MUST represent the seller in any transaction. Most listing agents, however, choose NOT to represent the buyer as well (ass a Dual Agent), maintaining clear loyalty to the seller only.
A cooperating agent (from another brokerage) who works for a listing broker-salesperson in the sale of a property. The subagent represents the seller, and therefore, works with the buyer, but not for the
buyer. The subagent owes fiduciary duties to the listing broker and to the seller. Although subagents can't assist the buyer in any way that would be detrimental to their client the seller, a buyer-customer working with a subagent can expect the subagent to treat him honestly. A subagent generally may provide the buyer with certain
types of services, often called ministerial services, which are factually based and do not require the licensee's judgment.
The vast majority of sales in this area of WV have the agent working ONLY for the seller, not the buyer. This is the OLD way of doing business. The buyer has no agent representing his interests when working with a subagent.
DISCLOSED or CONSENSUAL DUAL AGENT
Dual agency is a relationship in which the brokerage represents both the buyer and the seller in the same real
estate transaction. Dual agency relationships don't carry with them all of the traditional fiduciary duties to the clients; instead, dual agents owe limited fiduciary duties. The fiduciary duty of loyalty to the client is limited. This duty focuses on confidentially and the negotiation process. Because of the potential for conflicts of interest in a dual agency relationship, it's vital that all parties to the dual agency relationship give their informed consent. In many states, this must be in writing.
Dual Agency provides a unique transactional environment for the buyer and seller. It levels the playing field between the two parties and allows the transaction to take place in a non contentious environment. I work as a Dual Agent at all times when working with a buyer on one of my own listings.
What a Dual Agent Can and Cannot Do for a Client
Can and Should:
Provide complete information about the property to the buyer.
Disclose all known latent material defects about the property to the buyer.
Recommend and assist in a full range of testing and inspections for the property.
Help the buyer compare financing alternatives.
Provide information on comparable properties so that both parties (buyer and seller) may make educated decisions on the pricing.
Disclose confidential information about either client without permission.
Recommend or suggest a specific price to either the buyer or the seller.
Disclose the lowest price the seller will take for the property or the seller's financial position without permission
Disclose the highest price the buyer will pay for the property or the buyer's financial position without permission.
If you have any questions about what I can or cannot do for you, please ask. I generally work as a Dual Agent when selling my own listings, in order to work on a level playing field with both parties. I do not set or recommend either the listing price or the purchasing, or offering price. I provide the same (or essentially the same, due to different dates) comparables to both buyer and seller when establishing the list price with the seller and when determining a reasonable offer to make with the buyer. I do not suggest those prices or offers, though. If a listing price seems to be out of the proper price range (either too high or too low), I will suggest having the property appraised by a professional appraiser.
I always recommend and provide the opportunity to both buyers and sellers for appraisals, inspections, land surveys, and a multitude of other resources which will help them to understand the buying/selling process and make the very best judgments. When you have a listing or purchasing contract with me, I will give you access to extensive additional resources on my web site which are not available to the general viewing public.