Understanding Who Represents Whom When Buying or Selling a Home.
When buying or selling a home, you may interact with several real estate agents. But are they all working for you?
Not necessarily.
Understanding real estate agency helps you recognize who represents your interests, who represents the other party, and what responsibilities come with that relationship.
1. What Is Real Estate Agency?
In real estate, agency is the legal relationship between a client and a real estate professional who represents that client.
An agent's responsibilities include loyalty, confidentiality, reasonable care, and carrying out the agreed services.
Michigan law establishes requirements for agency relationships and disclosures in residential real estate transactions.
2. The Listing Agent
The listing agent, also called the seller's agent, represents the property seller.
Their responsibilities commonly include:
Advising the seller about pricing and marketing.
Arranging and coordinating property showings.
Presenting offers and counteroffers.
Helping the seller evaluate and negotiate offers.
Assisting the seller through the transaction and closing.
Important: The listing agent represents the seller's interests, even when communicating directly with an interested buyer.
3. The Buyer's Agent
A buyer's agent represents the person purchasing a property.
Their responsibilities commonly include:
Helping buyers identify suitable properties.
Arranging showings and evaluating homes.
Reviewing comparable sales and asking prices.
Preparing and negotiating offers.
Explaining purchase agreement terms and contingencies.
Helping coordinate inspections, financing, and other transaction steps.
A buyer's agent can help a purchaser understand not just what a home costs, but what they are agreeing to when making an offer.
Important: You can ask a listing agent questions about a property without that agent becoming your representative.
4. What Is a Real Estate Broker?
Real estate agents work through licensed real estate brokerages.
A broker is responsible for supervising the brokerage's real estate activities, and the agency agreement establishes the relationship between the client and the brokerage.
You may also encounter an associate broker, a licensed professional who holds a broker-level license while working under an employing broker.
The agent you work with may be your primary contact, but the brokerage is an important part of the representation relationship.
5. What Is an Agency Disclosure?
Michigan requires real estate licensees to explain available agency relationships and their responsibilities before a potential buyer or seller shares confidential information specific to a transaction.
This is commonly handled through a written document called the Disclosure Regarding Real Estate Agency Relationships.
It explains the different forms of representation and identifies the licensee's agency status.
An agency disclosure is not the same as a contract hiring an agent.
Signing to acknowledge receipt of the disclosure generally confirms that the information was provided, not that you have agreed to employ that agent.
You can review Michigan's agency requirements in Michigan Compiled Laws, Section 339.2517.
6. Representation Agreements
An agency disclosure explains representation. A representation agreement establishes the services and terms agreed upon between the client and brokerage.
Listing Agreement: An agreement between a seller and brokerage authorizing the brokerage to represent the seller in marketing and selling a property.
Buyer's Agency Agreement: An agreement between a buyer and brokerage establishing the terms of buyer representation.
These agreements may address the services provided, duration, compensation, and how the relationship can be ended.
Before signing, understand what you're agreeing to, including any exclusivity provisions and financial obligations.
7. Designated Agency and Dual Agency
Sometimes two agents from the same brokerage are involved in the same transaction, with one representing the buyer and the other representing the seller.
Designated Agency: Under a written designated agency agreement, particular agents are assigned to represent their respective clients. Michigan law allows those designated agents to represent opposite parties in the same transaction, with specific disclosure and supervisory requirements.
Dual Agency: Occurs when an agent represents both buyer and seller in the same transaction. This requires informed written consent and limits the agent's ability to provide the full range of separate representation duties.
These arrangements should be explained when applicable, but most buyers and sellers can begin by understanding ordinary buyer and seller representation.
8. Who Represents You?
Before discussing your financial limits, negotiating position, or personal circumstances with an agent, ask a simple question:
"Who do you represent in this transaction?"
For example, if you contact the agent whose name appears on a property listing, that agent generally represents the seller.
If you already have a buyer's agent, your agent can contact the listing agent, arrange a showing, and help you evaluate the property.
Likewise, sellers should understand that a buyer's agent is working on behalf of the buyer, even when both agents cooperate to complete the transaction.
Real estate transactions involve cooperation between many professionals, but representation is personal. Knowing who works for whom helps you communicate confidently, protect confidential information, and make informed decisions throughout the process.