Becoming a Client with a Realtor Agency AgreementIn "Does Your realtor Work for You?", the fiduciary responsibilities of a real estate agent to a client were outlined. If you are not the client, you do not benefit from the agent providing those responsibilities. Becoming a client is easy but does require some commitment.

For sellers, signing a listing agreement to place their property on the market makes them a client and affords them all the benefits of the agent's time, effort and fiduciary responsibility. Anything the agent learns about prospective buyers, the agent's marketing and negotiation experience, and the agent's confidentiality all accrue to the seller-client's benefit. Of course the agent expects to get paid for this provided value so the listing agreement specifies the commission to be paid to the agent upon sale and provides the agent a specific period of time in which to make the sale happen.

For buyers, signing a buyer's agency agreement provides the same fiduciary benefits as described above for the seller and provides a specified period of time in which the agent has to find the right property for the buyer. The agreement also specifies the commission to be paid by the buyer but only in the event that the seller does not pay - in which case the agent needs to advise the buyer ahead of time to avoid surprises. While there are a few exceptions, usually the seller pays the commission as specified in the listing agreement and the buyer pays nothing. So the buyer is the client even though they are not paying the agent.

There is one exception to all this. In North Carolina, agents and buyers can work under an oral buyer's agency agreement which is an implied agreement (evidenced through action rather than signed documents) that affords the buyer the benefits of the agent's fiduciary responsibilities without actually signing a buyer's agency agreement. This allows buyers to see properties without committing to the agent and puts the agent in a position of potentially not earning commission. Many real estate agents choose not to engage in oral buyer's agency agreements due to the risk of doing all the work and then not getting paid. The oral agreement must be put in writing prior to extending an offer to purchase and many buyers miss the fact that they have signed a buyer's agency agreement as part of their offer documents - later surprised that they and the agent have committed to each other.
Find out more about realtor agency agreements and how different situations can affect your client benefits and protections in "Dual Agency - Real Estate Agent Conflict of Interest"