The Difference Between a Buyer's and a Seller's Broker

Suppose you sign an offer to buy a home for $150,000. You really want the property and there's a chance other offers are coming in, so you tell the broker that "I'll go up to $160,000 if I have to. But of course don't tell that to the seller."

If you're dealing with a seller's agent, he or she is duty-bound to tell the seller that important fact. The seller's agent doesn't have any duty of confidentiality toward you. Honest treatment might require that the agent warn you that "I must convey to the seller anything that would be useful so don't tell me anything you wouldn't tell the seller."

Using an Agent and the Obligations That are Owed to You

An agent is bound by certain legal obligations. Traditionally, these common-law obligations are to:

• Put the client's interests above anyone else's;
• Keep the client's information confidential;
• Obey the client's lawful instructions;
• Report to the client anything that would be useful; and
• Account to the client for any money involved.

NOTE: A REALTOR is held to an even higher standard of conduct under the NAR’s Code of Ethics.

In recent years, state laws have been passed setting up various duties for different types of agents. As you start working with a REALTOR®, ask for a clear explanation of your state's current regulations, so that you will know where you stand on these important matters.