Another Real Estate Term Defined: “Agency”

Kimberly Bean
Kimberly Bean
Published on July 4, 2018

When you list your Southern Maryland home for sale or buy a home with the help of a real estate agent, get ready to sign a whole pile of paperwork.

In most states, one of the first you’ll be asked to put your pen to is called the Agency Disclosure, and it’s not unusual to see clients sign it without reading and understanding it. It’s not an exciting form, but you do need to know what it means.

In contract law, “agency” is a word used to describe the relationship created when one party, the principal, grants permission for another party, the agent, to act on his or her behalf (but under the principal’s control) to deal with a third party.

Don’t worry. You’re not the only one whose eyes are glazing over.

In plain English, here’s what that means: You are the principal and your Southern Maryland real estate agent’s broker is the agent.

You’re probably asking, “Wait … what about my real estate agent? Isn’t she the agent?”

She is, but not your agent. The real estate agent is the broker’s agent.


When you hire a Southern Maryland real estate agent to help you sell or buy real estate, he or she is acting on behalf of the broker. You may never meet the broker, but she is, in reality, your agent.

The duties of your agent

Agency relationships are fiduciary, which means that they are based on trust and confidence. Your agent has a fiduciary duty to you to never breach your confidence.

One of the agent’s primary duties is loyalty; he or she is obligated to always act in your best interests, to the exclusion of all other interests. Remember this one as we explore types of agency relationships, later on.

If you are buying a Southern Maryland home, your agent has a duty to disclose the following, if it is known to her:

  • If the seller will accept less than the asking price
  • Why the homeowner is selling the home
  • Her estimation as to the value of the property
  • Whether the property is owned or co-owned by the broker or any of her relatives
  • The number of days the home has been on the market
  • Any information she has on other offers presented to the seller

As you might imagine, the seller’s agent has similar duties to his client.

What happens, then, if you go to an open house, fall in love with the house, and aren’t currently working with a real estate agent?

Should you sign up with the agent at the open house? If you do, this situation is known as dual agency, which legal in some states, illegal in others. The agent must disclose to both buyer and seller that he or she is representing both of them.

Dual agency (in some states it is called “designated agency”) can also occur when two agents from the same brokerage represent both the buyer and the seller.

The bottom line with this form of agency is that the agent’s duties are divided. It becomes challenging to act in his clients’ best interests, “to the exclusion of all other interests.”

This isn’t to say that you shouldn’t enter into such a relationship. Take the time to check the agent’s qualifications. Seasoned, professional Southern Maryland real estate agents are more likely to be able to handle the challenges inherent in dual agency situations.

When your agent passes the Agency Disclosure form across the table for your signature, take the time to read it and do ask questions about anything you don’t understand.

Learn more about the different types of agency relationships in real estate at

Waldorf MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309

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