Depending on what state Michelle (ficticious name) practices real estate in she may or may not be Mr. Buyer's agent.
For instance in Tennessee where I practice real estate the default status for a real estate licensee is "facilitator", which is a non-agency status.
Tennessee licensees are required by law to disclose at "first substantive contact" their agency status to all potential consumers of real estate services.
In order for Michelle to become Mr. Buyer's official buyer's agent in Tennessee they must both sign a buyer agency agreement (sort of like listing a buyer) which details how Michelle will provide real estate services and how she will be paid for those services.
No agency agreement, no agency; or as my pal uber EBA Tom Early likes to say: "No tickee, no washee!"
The Tennessee Real Estate Commission also requires that the following 3 sentences be in all agency agreements in order for them to be enforceable.
- Client should not contact listing agents directly to view property without Broker (their agent)
- In the event Client comes into contact with another licensee they should immediately tell that licensee they are represented by a Broker.
- If Client purchases a property covered by this agreement from another licensee or a Seller's Agent, or directly from a seller, Client understands he still owes a commission to his Broker as set forth in this agreement. (this is my favorite part) ;-)
I still come in contact with a number of licensees who claim they're a buyer's agent but in fact they're not because they don't have any sort of written agreement with the buyer.
So if your buyer is introducing you or you're representing yourself as their "Agent" you need to make sure you really are.
And of course that REALTOR® Code of Ethics thingie still applies for REALTORS®
Before you sign a buyer (or seller) up to any sort of exclusive agency agreement you have to ask them if they are currently subject to the same agreement with another REALTOR®
Reference Article 16, Standard of Practice 16-9
- "REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service."
- The practice of agency varies greatly from state to state. You need to know how it works in your neck of the woods.