VERMACE Realty
400 1st Avenue, Suite #14, Coralville
Email: Vermace@Vermacerealty.com

319-339-7721

"Straight Talk ~ Solid Service"

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           Understanding Agency Relationships

Note:  While every reasonable attempt has been made here to be accurate in quoting Iowa law regarding "agency relationships," computers and web browsers are subject to error. The law may also change from time to time. Obtain a copy (from your real estate agent) of the latest interpretation of the law in the state where you are buying or selling property.

Before you disclose confidential information to a real estate licensee regarding a real estate transaction you should understand what type of relationship you have with that licensee.


Understand who may or may not be representing you.
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It's important to understand what legal responsibilities your real estate agent has to you and to other parties in the the transactions. Most Iowa Brokers are either a Designated Agency company or a Dual Agency company. Ask your salesperson to explain what type of agency relationship you have with him or her and with their brokerage company. 
              
                  Vermace Realty is a Designated Agency brokerage company.


An Iowa broker or salesperson may function in any of the following capacities:
          ~  Represent the seller as an authorized seller's agent or subagent.
          ~  Represent the buyer as an authorized buyer's agent or subagent.
          ~  Represent both seller and buyer as a disclosed dual agent authorized by both the seller and buyer.

1.  Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

2.  Buyer's representative (also known as a buyer's agent). A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer.

3.  Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction even if there are two agents involved in the transaction, one representing the seller and one representing the buyer. Since both agents are licensed by the same broker, they are still operating under dual agency if one agent represents the buyer and the other represents the seller. Dual agency relationships do not carry with them all of the traditional fiduciary duties and full representation to clients. Instead, dual agents and dual agency brokerage companies owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In Iowa, this consent must be in writing.

4.  Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the traditional fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.