A Salesperson Is Not An Agent

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Education & Training

The word "agent" casually is thrown around in the real estate sales business. Everyone with any sort of real estate sales license calls themselves an "agent", even though their license usually says something different. The fact is, many REALTORs who call themselves agents are misrepresenting their role.

Dictionary.com's definition of agent is "a person or business authorized to act on another's behalf". In my jurisdiction, New Brunswick, Canada; the license required to "trade in real estate" (enter into agency agreements) is called an "Agent's License". Many other jurisdictions call this type of license a "Broker's License". This license may be held by an individual or a corporation. In my jurisdiction, 98% of Agents are corporations. In these cases the Agent must employ a "Manager Licensee" to oversee the day to day business and salespeople employed by the corporation. The salespeople employed by the Agent are "Salesperson Licensees", this is the type of license that 95% of REALTORs in my jurisdiction have.

So, why is a salesperson that calls himself/herself an "Agent" misrepresenting their role? Simple, they have no capacity to enter into an agency relationship; only the "Agent" or "Broker" has that capacity. A listing client or buyer client are not represented by the salesperson, they are represented by the agent or broker, depending on licensing in that jurisdiction. If the salesperson leaves the company, what happens to that agency relationship? The seller or buyer remains a client of the Agent (Broker) and the salesperson is subtracted from the equation, because the relationship is with the Agency or Brokerage.

I don't know exactly when this misnomer began, but it leads to confusion about agency representation by both the public and real estate licensees. Example:

I recently had a buyer client that had initially contacted the listing office of a property he was interested in. He was put in contact with the "Duty Agent" (misnomer), not the listing salesperson, who had subsequently shown the property to him. Later he contacted me about the property, after asking him about his relationship with the other firm, and concluding that no agency relationship existed, I offered my services as his buyer agent. We wrote an offer that didn't result in a contract. When talking with my client a week or so later, he mentioned that he had been contacted by the duty salesperson to see if he was still interested in the property. He informed the salesperson that he had placed an offer through me. Upon hearing this, the salesperson made an offhand comment implying that my actions were underhanded. Thankfully, because I had properly explained agency to my client, he knew that I had acted in his best interests and that I had not done anything unethical.  

Did this salesperson believe that they had a buyer agency relationship with this customer, even though the firm they worked for was the listing agent of the property? It would seem so. Is the sole reason because of the misuse of the term "Agent"? No, but it doesn't help.

Agency is a concept that many find difficult to grasp and understand, the number of court cases and discipline matters relating to representation is a testament to this. If licensed professionals find it this difficult to understand, how is a member of the public expected to? Licensees are compounding the problem by giving themselves titles that confuse their role.

I am one of the few individuals licensed as an Agent in my jurisdiction. I am a real estate Agent. Licensed salespeople are not.

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Topic:
Home Buying
Location:
New Brunswick
Tags:
agency
advice
new brunswick
moncton

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Rainmaker
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Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Matthew, As a real estate broker licensed in California I have an agency relationship with my clients. If I employ a real estate salesperson, they are sub-agents to my clients, but the agency relationship is "alive and well" in any case.

Bill Roberts

Oct 03, 2007 03:04 PM #1
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Rainmaker
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Matt Estabrooks

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