Non-Agency Relationships & Agreements: Elements & Disclosures

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

You may run into unusual situations or opportunities to represent both the buyer and the seller. This lesson will help you understand how to handle this situation and ensure the appropriate steps are taken.

What Is a Non-Agency Relationship?

As an agent, you normally work with a buyer or a seller and have a defined relationship with that person. There are times you may help a buyer or seller without being their authorized representative. In this case you have a non-agency relationship, a situation where you have no binding or legal responsibility to the other party.

How does this work? Let's say your mom has a friend at church who wants to sell her house but doesn't want to hire an agent or pay commission. Your mom asks you to give the friend some pointers and help her know what she should do. You agree to talk to her friend, give her some suggestions and help her get started. However, you are not her agent, you do not do any or the work yourself, and she doesn't expect any results from you. You do not need a written agreement in this situation because you have not made any promises, nor does the friend expect you to work for her.

If there is any question or if you feel the friend may have unrealistic expectations, you need to clarify and get the arrangement in writing. Always protect your reputation and your real estate license, not to mention your mother's relationship with her friend. This is one example of a non-agency relationship.

Non-Agent Brokerage Relationships

Another situation may arise when you represent both the buyer and the seller as the transactional agent or facilitator agent. You help process paperwork, handle communication, and ensure the closing happens. You are not the exclusive agent for either party and cannot show favoritism to the buyer or the seller. Your job is to remain neutral and not give advice to either side. You are more of an assistant and facilitator than a representative. In this scenario, you will collect commission.

Creating a Non-Agent Brokerage Relationship

Non-agency relationships can be challenging because you have to be somewhat removed from the real estate transaction. You can't share private information and you can't assist the buyer or the seller in making offers, evaluating offers, or negotiating terms.

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