“All the world's a stage, And all the men and women merely players; They have their exits and their entrances, And one man in his time plays many parts . . .” William Shakespeare, As You Like It

In commercial life too we all play roles. Understanding all the actors in a real estate transaction is important for your protection. So much so that under Maryland law a real estate salesperson is required to give a prospective client a written disclosure the first time they meet face-to-face. The notice is called, “Understanding Whom Real Estate Agents Represent.” 

Property buyers and sellers can be unrepresented or represented by a licensed salesperson, let’s call them an agent for short. The status matters because an assortment of legal duties follows. A buyer’s agency relationship, for example, is created by entering into a written contract between the buyer and the agent’s brokerage. This contract imposes clear legal requirements on the agent:

• Loyalty: The agent must place your interests first, avoid conflicts of interest, and fight for you.

• Care: The agent must provide you with expert-level assistance, including a sharp, diligent approach to your transaction.

• Obedience: The agent must follow your lawful instructions.

• Confidentiality: The agent must not disclose your private information, including your budget, your motivations for buying or selling (including time pressures), or your strategy.

• Disclosure: The agent must be honest, not withhold information, and tell you all facts relevant to a transaction.

• Accounting: The agent must provide for your downpayments to be held securely in escrow and help make the financial aspects of the transaction clear to you.

A seller’s agency relationship imposes the same duties and is created by a written contract between the seller and the selling agent’s broker. It is typically called a listing agreement.

If you have entered into one of these agreements, you are the principal in a fiduciary relationship. The agent must perform his or her duties for you, the client, with your interests front and center.

Of course, you don’t have to hire an agent to buy or sell property. If you are an unrepresented buyer or seller, agents that you meet should still be honest in their dealings with you. But you will just be a customer, not their client. Remember, agents owe a legal, fiduciary duty to their clients to advance their best interests, not yours if you are merely a customer.