REAL ESTATE AGENCY

Agency is the relationship formed between a consumer and a Broker/Realtor who is hired to assist and represent him/her in a legal real estate transaction. The type of relationship formed between the Broker and the Client is called a fiduciary relationship. A fiduciary relationship is one based on trust because the Broker owes the following duties to the client:

Confidentiality
Accounting
Reasonable Care & Diligence
Loyalty
Obedience

Agency duties are enforced so that the Client can rely on the Broker to put the Client's interests before that of anyone else's. The Broker owes its allegiance to the Client. In real estate transactions, an Agency Relationship is formed between the Real Estate Broker and the Client via a written agreement. The Client may either be a Buyer or a Seller.

In Rhode Island, "real estate agents shall be considered to be the agent of the seller of real estate unless there is an agreement in writing to the contrary between the buyer(s) and agent, and such agreement is disclosed to all parties" Rhode Island General Law 5-20.6-2 Agent Status.

In other words, unless you have signed a Buyer Agency Agreement with an agent, that agent is a representative of the seller. Only when a buyer engages the services of a broker as a Buyer's Agent by signing a Buyer's Agency Agreement, does that Buyer become the broker's client and is therefore due the duties listed above. Once a Buyer and broker sign a Buyer Agency Agreement, the broker must put the Buyer's interest first and negotiate for the best price and terms for his/her client, the BUYER.

DISCLOSED DUAL AGENCY
A broker can work for both the Buyer and Seller on the same property provided such broker obtains the informed written consent of both parties. The broker is then considered a Disclosed Dual Agent. This broker owes both the Buyer and Seller a duty to deal with them honestly and fairly. In this situation an agent must maintain confidentiality owed to both parties and cannot strategize with one party against the other.