Understanding Seller Agency Laws

It's important to understand what legal responsibilities real estate agents and sellers have to each other and to other parties involved in a real estate transaction.

By law, a real estate agent must explain what type of agency relationship you, the seller, will have with them and with the brokerage company they represent, and in order for the agreement to be binding, a seller agency agreement must be signed by the seller and the agent. A verbal agreement between a property seller and an agent does not consitute an agency relationship. The agency relationship must be in writing and signed by both the seller and the agent prior to any real estate service being performed. If a seller agency agreement is not signed, the agent will be working as a facilitator, officially representing no one.

Once a sellers agency agreement is signed, their are certain duties your agent is required to perform. These duties and to whom they are directed to are listed below.

Duties owed to all parties include:

• Diligently exercise reasonable skill and care
• Disclose any adverse facts of which the agent has knowledge
• Maintain for each party confidentiality
• Provide services with honesty and good faith
• Disclose timely and accurate information re: market conditions when available and requested.
• Timely account for Trust Funds(Earnest Money) and keep in special account.
• Not engage in self dealing
• Not recommend any services in which the agent has any interest in or paid any fee without disclosure

Duties owed to you, the seller:

• Obey all lawful instructions within scope of agency
• Be loyal to the interest of the client
• Provide basic real estate services as outlined by law

In addition, Town & Country, Inc Realtors® has adopted a Designated Agency policy. This means one agent has been "designated" to represent you. The agent you enter into a sellers agency agreement with will be your Designated Agent. Speaking only to your designated agent is in your best interest since all other agents of the firm do not officially represent you.

The agency relationship you have with your agent could change during the process of selling your property. For example, if your agent is also the agent representing the buyers of your home, the agent will need to discuss with you your options since your Designated Agent has duties owed to both the buyer and the seller. This is necessary to ensure all parties involved are working in the best interest of those they have agreed to represent.

For more information about Seller Agency in Tennessee, please read this consumer handout distributed by the Tennessee Association of Realtors.