The intent of law of agency is to protect confidential client information. It requires preservation of confidential information at any time during or after an agency relationship.
The type of relationship formed between a broker and a client is a fiduciary relationship because it is based on trust. The broker owes a client: loyalty, obedience, disclosure, accountability, diligence, confidentiality, reasonable skill & care.
A buyer's agent is a real estate broker or sales associate who acts in a fiduciary capacity for the prospective buyer. The buyer's agent owes the buyer undivided fiduciary obligations. The buyer's agent must put the buyer's interest first and negotiate for the best terms and conditions for the buyer.
A seller's agent is a real estate broker or sales associate who acts in a fiduciary capacity for the owner. The owner may authorize their agent to cooperate with other brokers and sales associates to find a buyer for the property (CMLS). The seller's agent owes the owner undivided fiduciary obligations. The seller's agent must put the seller's interest first and negotiate for the best terms and conditions for the owner.
A dual agent is a real estate broker or sales associate who acts in a fiduciary capacity for both the owner and the prospective buyer after their informed consent. A dual agent does not exclusively represent the parties and they cannot expect undivided loyalty. However, the dual agent must be fair and honest to both the owner and the prospective buyer. A dual agent cannot disclose confidential information about one party to the other unless authorized by all parties, or as required by law.
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