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Customer Or a Client? Why does
it matter?
When you choose to work with a real estate licensee, he or she may or may
not be "your" agent. An agent owes certain duties to a client
but has a different obligation to a customer. You must know whether you
are a customer or a client in a real estate transaction, and it is your
decision as to how you will work with the licensee. You should discuss the
following information with the real estate licensee with whom you are
working in order to make an informed decision.
Who is a customer?
A customer is a person who seeks to purchase real estate, but who has NOT
established an agency relationship and is NOT represented by an
agent.
A customer can expect the
salesperson to provide honest information but cannot expect the
salesperson to act as an agent or to negotiate the best price in a
purchase. A real estate licensee is also obligated by law to treat
customers honestly, to disclose known material facts about the property,
and to promptly present all offers to the seller. As a buyer, you
may decide you don't need your own agent. The seller's agent may be able
to provide you with all the information you require to buy real property
without your being represented by your own agent; however, if you are a
customer, the licensee's primary loyalty is not to you. It is to his or
her client. The agent must convey all known information to his or her
client, such as your urgency to move or your willingness to increase your
offer.
Who is a client?
A client is a person who establishes an agency relationship with and
agrees to be represented by an agent in a real estate transaction.
A seller becomes a client of a
real estate company by signing a listing agreement with a licensee
associated with a company. This agreement must be in writing and must
clearly establish the obligations of both the seller and the agent. A
buyer becomes a client of a real estate company by requesting through a
licensee that the company be the buyer's agent. Such an arrangement must
be in writing and clearly establish the
obligations of both the buyer and the agent.
Who is an agent?
An agent is the licensee who, at your direction, acts for and represents
you, above all others, as his or her client. Acting on your behalf, an
agent in a real estate transaction will negotiate the best price and terms
for you. An agent owes utmost loyalty to you, the client, and must convey
to you any information he or she knows which might influence your decision
to buy or sell.
What is a dual agent?
In certain circumstances, which should be explained to you by the
licensee, an agent may represent the buyer and seller in the same
transaction provided each has consented in writing prior to the
transaction. This arrangement is called dual agency since one agent
represents both parties and both remain clients of the company.
Working with a dual agent is not the same as having your own agent. For
instance, when representing both a buyer and a seller, the dual agent must
not disclose to only one party confidential information obtained
from the other party. Also, a dual agent may not be the advocate for
either party and cannot negotiate for nor advise either as to price or
terms.
It is important that you discuss
this with the licensee in order to understand the limits of services which
a dual agent can provide and to determine whether you want to modify a
relationship that you may have established.
Do you want to be a customer
or a client?
Do you want to receive services (customer) or be represented
(client)? If you are not sure, discuss your options with the real
estate licensee with whom you are working. It is your choice and you need
to decide whether you will hire an agent or be self-represented. At your
discretion, it may be advisable for you to
obtain legal or other professional advice in connection with a
transaction. It is your continuing responsibility to protect your own
interest.
Please ask to see the actual text
of the Acknowledgement of Agency Disclosure used by all Real Estate Agents
in California.
May I work for you in a
"client" relationship?
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