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Who do real estate brokers represent?

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A broker can be engaged by either party to a real estate transaction as instructed by that party, to whom the broker has a fiduciary duty.  When acting as a seller’s agent, brokers help property owners in marketing and selling their property for the highest price and at the best terms; when acting as agent for the buyer, brokers help the buyers to purchase property for the lowest price and at the best terms.

Unless prohibited by contract, a broker may act both for the seller/landlord and for the buyer/tenant and demand full commission from both parties.  Dual agency is when a broker acts as intermediary for both the buyer and the seller of a property.   Undisclosed dual agency is illegal in the U.S. and acting for both parties would be a breach of contract if this leads to a conflict of interest.

When brokers have dual agency, the broker must disclose to both parties in a dual agency agreement which party is represented as a client and which party is represented as a customer.  The “client” is the party to whom the broker has a fiduciary duty and whose interests it must promote and protect, while the “customer” is the counterparty of the client, who the broker is obligated to treat with fairness, honesty and integrity and provide with conscientious and competent service.

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