By: Rhonda Gaskins
THERE ARE BASICALLY 3 TYPES OF REAL ESTATE BROKERAGE RELATIONSHIPS
As real estate transactions have become more complex and varied the types of real estate brokerage arrangements available to the public have changed. Alabama law requires you, the consumer, to be informed about the types of services which real estate salespersons may perform.
As soon as reasonably possible and before confidential information is exchanged, Alabama law requires the salesperson to provide you with a written disclosure form that describes different types of brokerage services. This is called a Real Estate Brokerage Services Disclosure (RECAD) form. You are encouraged to read and sign this disclosure form. This is not a contract.
There are basically three types of real estate brokerage relationships (services) that can be established between the consumer and a real estate salesperson: Single agency, limited consensual dual agency and transaction brokerage arrangement.
A Single Agent is a licensee (salesperson/agent) who represents only one party in a sale. That is, a single agent represents his or her client. The client may be either the seller or the buyer but not both. A single agent must be completely loyal and faithful to the client and place the interest of the client ahead of the interest of any other party. In a real estate transaction, when a real estate salesperson is employed as an agent, the salesperson is obligated to negotiate the best price and terms for the client.
A Buyer’s Agent is a real estate licensee (salesperson/agent) who is employed by and represents only the buyer in a real estate transaction. This relationship is created in writing. This contract should clearly state the service the agent will perform for the buyer as well as specify how the agent will be paid for services rendered. This type of real estate brokerage agreement should be used when the buyer needs guidance and representation when negotiating with sellers to purchase real estate.
A Transaction Broker assists one or more parties in a sale. A transaction broker is not an agent and does not perform the sale services as an agent. This means that the real estate broker and salespeople can act as intermediaries (paperwork shufflers) between buyers and sellers. With this type of brokerage agreement, home buyers and sellers are customers and not clients of the licensees with whom they are working. The basic function of the licensee is to bring buyers and sellers together so that a real estate sale can be completed.