When you decide to purchase or sell a home, it is important that you understand the laws that define the relationships between sales associates (agent) and buyers and sellers. These are referred to as laws of Agency.

The relationship between a sales associate and a client is a fiduciary relationship that is based on trust. The sales executive owes a client:

• Care
• Obedience
• Accountability
• Loyalty
• Disclosure
• Confidentiality

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The following is a description of the different types of Agency laws in Connecticut:

Buyer Agency
A buyer’s agent is a real estate broker or sales associate who acts in a fiduciary capacity for the prospective buyer. The buyer’s agent owes fiduciary responsibility to the buyer. The agent must disclose to the buyer client any and all facts or information the agent learns about the property, the seller's motivation or the transaction. The agent must place the buyer’s interest above the interests of all others. This includes the duty not to disclose any confidential information about the buyer’s affairs.

Seller Agency
A seller’s agent is a real estate broker or sales associate who acts in a fiduciary capacity for the owner. The agent must place the owner’s interest above the interests of all others and negotiate for the best terms and conditions for the owner. The agent must disclose to the client any and all facts or information the agent learns about prospective buyers or the transaction. This includes the duty not to disclose any confidential information about the client's affairs.

Designated Agency
Designated Agency occurs when the real estate broker or real estate brokerage firm appoints one of the broker’s or firm’s salespersons to solely represent the buyer and another salesperson or salespersons to solely represent the seller. The Designated Agents may provide the entire array of fiduciary duties to the clients for whom they have been appointed. This includes advocacy on the client’s behalf and advice and opinion to the client including the Designated Agent’s opinion as to the value of the property, what price to offer, or what offer to accept.

Compensation
Real estate agents (and the brokers with whom they are licensed) are typically paid a commission. The commission is calculated as a percentage of a home's sale price. It is derived from the proceeds of the home sale, and is really generally paid by the seller. The listing broker divides this fee, and shares it with the real estate listing agent and cooperating buyer’s broker/agent (if any) in the transaction.