Florida Real Estate Agent Relationships

Transaction broker or single agent? Can you tell the difference?

Do you know what kind of relationship you have with your Florida real estate agent?

In the State of Florida there are three types of relationships you can enter into with a real estate agent or REALTOR® – Single Agent, Transaction Broker and No Brokerage Relationship. Each relationship varies by the level of representation a real estate agent will provide. A person who engages a real estate agent as a Single Agent becomes that agent's client or "principal." By law, the Single Agent has a fiduciary duty; meaning they must be obedient, loyal and provide full confidentiality; to the principal. Having a fiduciary duty to both a seller and buyer in a transaction can cause serious conflicts of interest. This is what is referred to as a dual agency. It is not allowed in Florida, thus the majority of real estate sales are facilitated by a Transaction Broker.

Transaction Broker

A Transaction Broker Relationship provides limited representation, which means that the customer has given up their rights to the undivided loyalty of the agent and, therefore, is not a client or "principal" of the agent. This type of limited representation allows real estate agents to facilitate a transaction by assisting both the buyer and the seller, but will not work to represent one party to the detriment of the other. The agent represents the transaction only. [dt_sc_pullquote type="pullquote4" align="right" icon="no"]Florida Statutes, states: “It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.” [/dt_sc_pullquote] If you engage a real estate agent in Florida, either as a buyer or a seller, it is presumed that you have entered into a Transaction Broker Relationship unless the agent or broker provides you with a Single Agent or No Brokerage Relationship Agreement. Transaction Broker duites include:

  • Dealing honestly and fairly.
  • Accounting for all funds.
  • Using skill, care, and diligence in the transaction.
  • Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
  • Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
  • Limited confidentiality, unless waived in writing by a party. This is intended to prevent the associate from disclosing 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, or the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential.
Single Agent

Single Agent relationships are created when an agent agrees to act solely on the behalf of a client, be they a seller or a buyer. Once a Single Agent relationship is established with an agent of a brokerage firm, all agents within that brokerage become Single Agents and owe that client fiduciary duties. Each and every one of the brokerage’s agents must place the client's interests ahead of their own and refrain from any self-dealing. Single Agent duties include:

  • Dealing honestly and fairly.
  • Loyalty.
  • Confidentiality – everything that transpires during the relationship can never be disclosed unless the principal or client directs the agent to do otherwise – best to get this in writing.
  • Obedience – the agent must obey the principal as long as what the principal is directing the agent to do is within the law.
  • Full disclosure – Everything the agent discovers about the transaction, the property or the other party must be disclosed to the principal.
  • Accounting for all funds.
  • Skill, care, and diligence in the transaction.
  • Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
  • Disclosing all known facts that materially affect the value of residential real property and are not readily observable.

A challenge arises when a buyer in a Single Agent Relationship with a real estate agent is interested in purchasing a home listed with the agent's broker. Before moving forward both the buyer and the seller must consent in writing to Transition to a Transaction Broker releasing the agents of the firm from their fiduciary duties. However, anything that transpired during the Single Agent Relationships continues to be protected by the Single Agent agreement meaning the agents can not disclose any confidential information obtained during that period without the written consent of their former clients. Per Florida State law, the duties of a single agent must be fully described and disclosed in writing to a buyer or seller either as a separate and distinct disclosure document or included as part of another document such as a listing agreement or other agreement for representation.

No Brokerage Relationship

What about when a buyer without representation contacts a real estate agent who has a single agent relationship with a seller and wants to purchase the seller’s home? What if the seller refuses to transition to a transaction broker? The buyer will either have to employ a single agent from a different brokerage to represent him or the seller’s agent, by law, must have the buyer sign the No Brokerage Relationship disclosure. This leaves the buyer with no representation in the transaction. No Brokerage Relationship duties include:

  • Dealing honestly and fairly.
  • Disclosing all known facts that materially affect the value of residential real property which are not readily observable to the buyer.
  • Accounting for all funds entrusted to the licensee.

Whether you are buying or selling a home, make sure you understand the type of relationship you have established with the real estate licensee that you have engaged. [simple-social-share]