Agency Relationships and Representation Models

A seller's agent (listing agent) represents the seller and owes full fiduciary duties exclusively to the seller. A buyer's agent represents the buyer and owes full fiduciary duties exclusively to the buyer. In a single agency model, each agent in the transaction represents only one party, which minimizes conflicts of interest and provides clear lines of duty.

Dual agency occurs when a single agent or brokerage represents both the buyer and the seller in the same transaction. Because the agent owes loyalty and confidentiality to both parties — whose interests are inherently adverse — dual agency creates significant conflicts. Several states, including Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, and Wyoming, have banned dual agency entirely. In states that permit it, dual agency requires informed written consent from both parties and typically converts the agent's role to that of a neutral facilitator with limited duties.

Designated agency (sometimes called appointed agency) is a compromise between single agency and dual agency. When a brokerage has both the listing and a buyer interested in the same property, two different agents within the brokerage are designated to represent each party independently. The brokerage itself becomes a dual agent, but each individual agent owes full fiduciary duties to their respective client. Information barriers within the brokerage help protect confidentiality.

Transaction brokerage (also called non-agency or facilitation) is a model in which the real estate professional assists both parties in completing the transaction without establishing a fiduciary relationship with either. The transaction broker owes duties of honesty, fair dealing, and competent service, but does not owe loyalty or confidentiality to either party. This model is the default in some states, including Colorado and Florida, unless the parties specifically agree to a different arrangement.

Agency relationships in real estate are typically created through express written agreements — listing agreements for sellers and buyer representation agreements for buyers. However, agency can also arise through implied conduct, such as when an agent repeatedly shows properties to a prospective buyer without a formal agreement, leading the buyer to reasonably believe the agent is acting on their behalf. Implied agency creates legal obligations even without a signed contract, which is why many brokerages require agency disclosure forms at first substantive contact.

Agency relationships can be terminated by completion of the transaction, expiration of the agreement term, mutual consent, revocation by either party (though early termination may trigger compensation obligations), or by operation of law (such as the death or incapacity of either party, destruction of the property, or bankruptcy). Some fiduciary duties — particularly confidentiality — survive termination and continue to bind the agent indefinitely.