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Differences Between Real Estate Customers & Clients

Instructor: Racquel Fulton
What is the difference between real estate customers and clients? Although the words are often used interchangeably, in real estate they signify very different roles, so it is important to be able to distinguish between the two. In this lesson, we will review what determines if someone is a customer or client in real estate.

Who Is a Customer?

Marcie sees a sign advertising a house for sale. She calls the real estate agency that is marketing the property. Marcie speaks with Drew, a salesperson. Marcie tells Drew that she is not working with a real estate agent and schedules an appointment to tour the property. Marcie is now Drew's customer.

A customer is someone who is making a buying decision. A buying decision is the process of evaluating the benefits of making a purchase. Buying decisions in real estate can include asking questions, researching, and comparing various properties for sale. In our example, Marcie became Drew's customer because she contacted him to help her in making a buying decision.

When a licensed real estate salesperson or broker has initial contact with a potential buyer or seller, that person is a customer. Although there is no agency relationship with a customer, salespersons and brokers are required by real estate licensing laws to follow certain guidelines when servicing customers, including:

  • Salespersons must disclose to the customer who they are representing in a real estate transaction.
  • Salespersons must provide customers with required notices and disclosures.
  • Customers are not entitled to representation. A salesperson or broker cannot make any decisions, no matter how beneficial they may be, on behalf of a customer.

Representation Options

During the appointment, Drew provides Marcie with a Consumer Notice. Drew is licensed in Pennsylvania, and is required by his state's licensing laws to provide potential buyers and sellers with this notice. It informs a customer (also referred to as a consumer) about the various types of representation that can be provided to them. Representation is the authority to handle a legally binding matter on behalf of another person. In real estate, the types of representation include:

  • Buyer's agents: Represent only the buyer in a real estate transaction.
  • Selling agents: Represent only the seller in a real estate transaction.
  • Dual agents: Represent the buyer and seller in the same real estate transaction.

Who Is a Client?

Representation is only available to a client. A client has a contractual relationship with an agent. An agent represents a client in a legal transaction, such as the purchase of a home. That is why real estate salespersons and brokers are commonly referred to as 'agents'.

Marcie has made a buying decision and asks Drew to submit an offer to purchase the property. Before doing so, Drew asks Marcie to sign a buyer's agent agreement. When Marcie signs the agreement, Drew can handle the real estate transaction on her behalf. Marcie is now Drew's client.

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