In most states, real estate law now allows a real estate professional to represent a buyer as a legal "agent," with all of the fiduciary responsibilities that go with true "agency." Though it's common to refer to real estate professionals as "agents," in most cases today they're really not, in the legal sense of the word. Without a written agreement of "agency," you can be represented, and get most of the benefits and services that a true "agent" would provide.
Some Customers Don't Want a True Agent
Why would an attorney, who knows the law and otherwise wants to work with a real estate professional, not want them to be their legal agent? As such, the attorney client could be held liable for the actions of their real estate agent. Though some ethics violations might not be a threat, if the real estate agent does something illegal, the attorney client could be held liable in a lawsuit as well. Let's say that an attorney lists a home with a real estate broker, but doesn't sign with them to be an "agent." The real estate broker provides all of the marketing, negotiation and closing services expected. And, in most cases, there is no perceptible difference in services or results whether an agency agreement is signed or not.
An Agent and Their Client Can Both Be Held Liable
But, let's say that during the progress toward closing the attorney's real estate listing broker learns something about the property that they don't really consider that important, so it isn't disclosed to the buyer or to the listing client. This is important, as the attorney seller doesn't even know about this issue. And, it may not even be a violation of law, but more of an error of omission. Later, perhaps long after closing, this issue jumps up and becomes a real problem. The buyer sues the real estate broker for not disclosing a material fact that would have influenced either their decision to buy, or the price they would have paid.
Vicarious liability would probably involve the attorney seller in the lawsuit as a defendant right along with the real estate broker. Though that may have been the course anyway, there's more validity to the inclusion of the seller in the suit, as they and the "agent" are considered one and the same in a legal sense. Some real estate professionals believe that their true value to a client is as a legal agent. Many others are quite successfully representing their customers without a written contract of agency. As a buyer, it's your decision how you want to work with a real estate professional. Ask them to explain any differences in services or loyalty associated with agency or non-agency representation.
James Kimmons - Business Technology and Marketing Writer Writing for business, particularly on the Internet, requires the ability to get to the point, ...
