Types of Client Representation in Real Estate Transactions

Agency, subagency, and other roles you might assume

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Most states require some form of disclosure to the client or prospective client as to how you will be representing them in their real estate transaction. Your duties and obligations to the client will vary significantly based on the type of representation to which you've contractually agreed. Learn more about what these various duties are.

Key Takeaways

  • Agency is a top-level form of representation in which the agent is bound to fiduciary duties like confidentiality and full disclosure.
  • Buyer agency requires the buyer agent to exercise fiduciary duty on behalf of the buyer.
  • Dual agency and designated agency are viewed as precarious agencies because it's virtually impossible to exercise fiduciary duties.
  • Generally speaking, choosing the honest and transparent move when conflicts of interest arise is the best way to go.

Agency and Buyer Agency

"Real estate agent" is a generic term referring to our occupation, but does not always define an agent's position and duties in a transaction. "Agency," the highest level of representation—it requires certain fiduciary duties, including client confidentiality and full disclosure. The confidentiality requirement continues after the transaction is completed. You are working in the client's best interests, meaning trying to get the most money for your seller's listing or the lowest price for your buyer.

In most states, if you have not specifically agreed to an agency relationship with your client, you are not their agent with respect to fiduciary requirements. You would still be required to treat all parties fairly and honestly, but would not necessarily owe confidentiality or full disclosure to your customer. This status has become more widely utilized with the expansion of buyer agency, representing buyers as their agent.

Dual Agency

Dual agency—representing the buyer and seller—is a tricky designation that's used in most states. Why? It's virtually impossible to provide confidentiality and full disclosure to two clients at the same time. It requires careful disclosure to both clients that your ability to represent them aggressively has changed. It is considered by many to be a risky practice, with possible conflicts of interest.


In some states—Florida, for example—dual agency is banned.


Subagency describes an agent who brings a buyer for another company's listing. The subagent is working on behalf of the seller, owing them fiduciary duties. It's rare now because it's bad for buyers and makes brokers and sellers vicariously liable for the actions or errors of the buyer's representative.

Designated Agency

Designated agency allows a brokerage to offer an alternative to a dual agency. Basically, in designated agency, the broker assigns one agent to be the agent of the seller, and another agent to represent the buyer. They both retain agency status with the required fiduciary obligations. It necessitates certain procedures to keep the respective clients' information separated in-house, with access limited to the appropriate agent.


Designated agency is viewed by some experts as being no different than dual agency, in that it's virtually impossible for buying and selling agents from the same broker to act in the best interest of the buyer and seller.

Roles Without Fiduciary Responsibility

Under various names, "transaction brokerage," "facilitator," and "non-agency" are all roles without agency fiduciary duties. They are fair to all concerned but facilitate without agency. However, in some cases, unethical agents may take advantage of their lack of fiduciary duty.

Dealing With Agency Conflicts of Interest

Study the law in your state as it regards real estate representation. Then study the options that your broker chooses to offer their customers. All brokers do not have to offer all types of representation. The remedies to the client for breach of fiduciary duties can be painful for the agent and broker.

Buyer agency, the practice of providing top-level agency representation and fiduciary duties to buyers, has become quite popular in most areas. Now you can have a written agency agreement with a buyer that promises them all the fiduciary obligations of the agency and your very best efforts on their behalf.

But that can cause issues when you're writing a purchase contract for a buyer on your or your company's listing where you've also signed an agency representation agreement. Now your company is an agent for both the principals in the transaction. Obviously, that's a problem, as you can no longer fulfill the requirements to keep all their information private and to disclose all you know at the same time.

An example would be a seller(s) divorce situation. If you're their agent, you will not disclose that, but if you were the buyer's agent and had no relationship with the seller, you would give this information to your buyers to possibly help them make a better deal. If you're a dual agent, you cannot do either. So you have to let both parties know that your new status has changed your ability to serve them.

From a purely customer-focused and ethical perspective, no matter what your role or representation status, be honest, fair and transparent in your dealings.

Frequently Asked Questions (FAQs)

What is the difference between subagency and dual agency?

Subagents typically work for the seller's agent by finding buyers for a listing. Their fiduciary duty lies with the seller. Dual agents, on the other hand, work on behalf of the buyer and seller at the same time and have a fiduciary duty to both.

What is agent representation?

Typically, buyers and sellers in a real estate transaction have agent representation. The buyer works with a buyer's agent and the seller works with a seller's agent. An agent may represent both the buyer and seller, although this practice is outlawed in multiple states.

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  1. Feldman & Feldman. "Breach of Fiduciary Duty in Real Estate Transactions."

  2. Adam Law Group. "A Quick Guide to Florida Agency Law."

  3. CA Realty Training. "What Is Dual Agency in Real Estate?"

  4. Florida Legislature Online Sunshine. "475.278 Authorized Brokerage Relationships; Presumption of Transaction Brokerage; Required Disclosures."

  5. Clever. "5 Things to Know About Subagents in Real Estate."

  6. Maryland Realtors. "What Is a Subagent."

  7. Connected Risk Solutions. "How Vicarious Liability Functions in Real Estate."

  8. Consumer Advocates in American Real Estate. "Designated Agency—Is It Fraud?"

  9. IFREC Real Estate Schools. "Florida Agency Law: Single Agent, No Agency, and Transaction Broker."

  10. Consumer Federation of America. "New Report Shows that Most Florida Real Estate Agents Work as Facilitators, Providing Their Customers No Loyal Representation and Overcharging Them for Their Services."

  11. PropertyClub. "What Is a Transaction Broker and When Should You Hire One?"

  12. Castle Realty. "What Is Buyer's Agency?"

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