Are You A Client, Or A Customer?
It is very important to know who does or doesn't work for you!

When you choose to work with a real estate licensee, he or she may or may not be "your" agent. An agent owes certain duties to a Client but has a different obligation to a Customer. You must know whether you are a customer or a client in a real estate transaction, and it is your decision how you will work with the licensee.

Definitions:

Agent: One who is authorized to act in the best interests of a principal and is obligated to place the principal’s interest before all other interests, including the agent’s.

Client: (principal) The party to an agency relationship. (The buyer is the customer of the Seller’s agent; the Seller is the customer of the Buyer’s agent)

Subagent: One who is authorized to act on behalf of an agent by a Principal (Agent for an Agent).

Customer: A customer is a person who seeks to purchase real estate, but who has NOT established an agency relationship and is NOT represented by an agent.

     A customer can expect the salesperson to provide honest information but cannot expect the salesperson to act as an agent or to negotiate the best price in a purchase. A real estate licensee is also obligated by law to treat customers honestly, to disclose known material facts about the property, and to promptly present all offers to the seller.

     As a buyer, you may decide you don't need your own agent. The seller's agent may be able to provide you with all the information you require to buy real property without your being represented by your own agent; however, if you are a customer, the licensee's primary loyalty is not to you. It is to his or her client. The agent must convey all known information to his or her client, such as your urgency to move or your willingness to increase your offer and how much if you tell him or her.
Who is a client?

     A client is a person who establishes an agency relationship with and agrees to be represented by an agent in a real estate transaction.

     A seller becomes a client of a real estate company by signing a listing agreement with a licensee associated with a company. This agreement must be in writing and must clearly establish the obligations of both the buyer and the agent.

     A buyer becomes a client of a real estate company by requesting through a licensee that the company be the buyer's agent. Such an arrangement must be in writing and clearly establish the obligations of both the buyer and the agent.

Who is an agent?

     An agent is the licensee who, at your direction, acts for and represents you, above all others, as his or her client. In California, once an agency relationship is created, the broker-in-charge of the company is considered to be the agent of the client, and all licensees within the company become sub-agents of the broker-in-charge representing the same client.

     Acting on your behalf, an agent in a real estate transaction will negotiate the best price and terms for you. An agent owes utmost loyalty to you, the client, and must convey to you any information he or she knows which might influence your decision to buy or sell.

What is a dual agent?

     In certain circumstances, which should be explained to you by the licensee, an agent may represent the buyer and seller in the same transaction provided each has consented in writing prior to the transaction. This arrangement is called dual agency since one agent represents both parties and both remain clients of the company.

     Working with a dual agent is not the same as having your own agent. For instance, when representing both a buyer and a seller, the dual agent must not disclose to only one party confidential information obtained from the other party. Also, a dual agent may not be the advocate for either party and cannot negotiate for nor advise either as to price or terms.

Fiduciary Duties to a Client (Principal)

UNDIVIDED LOYALTY – The agent can not advance any interests adverse to the Principal’s interest. The agent must act in the best interest of the Client.

OBEDIENCE – The agent must act subject to the Client’s continuous control by not exceeding the scope of authority conferred by the Client and following all lawful instructions.

REASONABLE CARE AND DILIGENCE – The agent shall protect the Client from foreseeable risks and recommend that the Client obtain expert advice or assistance when the Client’s needs are outside the scope of the agent’s expertise.

CONFIDENTIALITY – The agent can not communicate personal information about the Client which was given to or acquired by the agent within the scope of employment as an agent to the Client. Personal information must be kept confidential unless permitted by the Client.

FULL DISCLOSURE – Agent shall disclose affirmatively all information concerning the transaction which might affect the Client’s best interests.

ACCOUNTING – The agent shall promptly report to the Client all money and property received and paid out and upon request, render an accounting. Agent shall safeguard any and all money or property held on behalf of the Client.

Duties and responsibilities to a customer:

HONESTY AND FAIR DEALING– No fraud or misrepresentation and must disclose material facts.

WE ONLY WORK WITH CLIENTS!