Single Agency vs. Transaction Brokerage
Why Should You Care About Representation?
When it comes down to the nitty gritty details of a real estate deal, how can you ensure that your interests are being properly represented? Understand the difference between Single Agency and Transaction Brokerage.
No, this is not the sexiest blog post about real estate you’ll ever read… But, if you’ll spend some time understanding what this means, and ensure that you’re properly represented. You could quite literally save yourself thousands upon thousands of dollars!
First things first, if you don’t sign anything that states you’re being represented as a single agent, then the assumed relationship is transaction brokerage.
In order to receive Single Agency representation – according to Florida Statutes Section 475.278(3)-(1)(b)
The disclosure must be made before, or at the time of, entering into a listing agreement or an agreement for representation or before the showing of property, whichever occurs first.
Point being… Get it in writing!
Ok, Next Question…
What Is The Difference Between The Two?
I’m glad you asked. For starters, you can see a PDF of each below.
As you can see, the 4 benefits you receive with Single Agency that you don’t with Transaction Brokerage are:
- Full Disclosure
What Does This Really Mean Though?
If I represent you as a single agent, and we find the perfect house for you. When I call the listing agent to have a conversation about the property (before making an offer) they mention to me that the seller would like to, “just cover their mortgage and closing costs” with the sale. Since I am loyal to you, I’m going to pass that information along, as it will be very beneficial in beginning to assess what the owner is willing to take.
Now, if I were a Transaction Broker and that same situation occurred, the story would have a different ending. Reason being, according to the transaction brokerage agreement, “This limited confidentiality will prevent disclosure that the SELLER will accept a price less than the asking or listed price, that the BUYER will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property…” So, I am legally obligated not to share that information.
If you’re wondering why a real estate brokerage would not want to represent their buyers/sellers as a single agent, the reason is simple… Added liability and risk. With increased representation responsibilities comes increased risk.
- Make sure your agent, whether you’re buying or selling, represents you as a single agent.
- If that’s not possible, be aware that the agent has certain restrictions on the information that they can share with you.
- If the agent you’ve chosen is unwilling or unable to be a single agent, and you’re not in a position to do the research necessary to make a completely informed decision – find an agent who will represent you as a single agent.