There is a Difference

Ever wondered about the meaning of the term real estate "agent?" Many believe the term "agent" and "salesperson" are synonymous, but as the terms relate to real estate, their difference is quite important.

The dictionary defines "agent" as "a person empowered to act for another." A salesperson is defined as "a person employed to sell goods." Although real estate agents are actively involved in sales work, their responsibilities as an "agent" go much further.

Under the "law of agency," an individual may be employed or "empowered" to act on behalf of another. For example, homeowners may employ a real estate company as their "agent" to represent their interests in locating a buyer. Then the "agent" is obligated to faithfully represent the owners' interests by locating a purchaser at the highest possible price, and on favorable terms.

When the agent represents the sellers, only one obligation - honesty - is owed to the other parties to the transaction. In short, when representing the sellers, the agent acts on their behalf, while treating the buyers with complete integrity.

Does that mean buyers should be wary of agents who represent sellers? Not at all. They should, however, be informed about whom the agent is representing.

Can buyers also be represented by an agent? Of course, but any such arrangement should be formalized in writing, including an agreement regarding compensation.

Whether buying or selling a home, it is wise to know who is represented by whom. If in doubt, ask.