Understanding Agency Relationship


The Connecticut Association of Realtors has provided the following guide explaining Connecticut state law on Real Estate Agency Relationship, its purpose, and its benefits to buyer and seller alike.  Prior to the passage of this law, which was written in the interest of offering representation to buyers as well as to sellers, Realtors were considered to be agents of the seller and buyers were, for the most part, unrepresented.  There are now four types of agency relationship which are clearly defined in the following paragraphs, written in the interest of protecting the consumer in varying circumstances.


The agency relationship is based on one person representing the interests of another person. Real Estate Agents are licensed by the state to represent a person in the purchase or sale of a property. The responsibility of the real estate agent is defined by the state law relating to agents, the REALTORS® Code of Ethics, and general principles of agency law.

The type of relationship formed between the agent and the client is called a fiduciary relationship. A fiduciary relationship is one based on trust because the agent owes the following duties to the client: Loyalty, Obedience, Diligence, Disclosure, Confidentiality, Accountability and Reasonable Skill & Care.

Each agency relationship carries with it legal duties and responsibilities on the part of the broker/salesperson as well as the



A buyer’s agent acts solely on behalf of the buyer. A buyer’s agent has fiduciary duties to the buyer which include reasonable care, undivided loyalty, confidentiality and full disclosure. Buyer’s agents often work with seller, but do not represent the seller. However, in working with a seller, a buyer’s agent must act honestly and fairly.

A Buyer’s Agent:

  • Arranges property showings that meet the buyer’s needs.
  • Provides information about the home or property, community, schools, taxes, utilities, and zoning. Disclose any information about the property that can be obtained by public sources.
  • Prepares a competitive market analysis on the property.
  • Counsels the buyer on what price to offer the seller.
  • Shows what other buyers are paying for property in the area.
  • Assists in writing an offer with the buyer’s interest in mind.
  • Negotiates the best price & terms for the buyer.
  • Keeps the price capabilities and objectives of the buyer confidential, and maintains anonymity if desired.
  • Assists with the loan application process.
  • Monitors all dates, events, and requirements for the buyer.
  • Attends the closing with the buyer.


A seller’s agent acts solely on behalf of the seller. A seller’s agent has fiduciary duties to the seller which include reasonable care, undivided loyalty, confidentiality and full disclosure.

Although a seller’s agent does not represent the buyer, a seller’s agent must treat buyers honestly and fairly. A seller’s agent must also disclose all material facts about the seller’s property that are known by the broker.

A Seller’s Agent:

  • Prepares a competitive market analysis of the seller’s home or property.
  • Develops and implements effective marketing strategies for the seller, including asking price, staging and positioning.
  • Informs the seller how much other homes and properties have sold for in the area.
  • Presents all offers and counsels seller on what price to accept.
  • Negotiates exclusively on the seller’s behalf.
  • Updates the seller on market conditions.
  • Prepares an estimate of closing costs.
  • Works closely with seller to assure a smooth.
  • Monitors all dates, events, and requirements for the seller.
  • Represents the seller’s interest at the buyer’s walk-through inspection.
  • Attends the closing with the seller.


Legal in all 50 states. Dual agency occurs when a real estate firm representing the buyer shows the buyer properties where the firm has also agreed to be an agent of the seller. A real estate firm can be an agent of both the buyer and seller in a transaction with the knowledge and written consent of the buyer and seller.

A real estate firm acting as a dual agent must carefully explain to both buyer and seller that they are representing both parties and their fiduciary duties are different if they represent both parties.

When representing both seller and buyer, the agent must have the express permission of the respective party in order to disclose confidential information to the other party, such as price, terms and motivation to sell or buy. A Dual Agent owes both the buyer and seller equal representation, and must:

  • Treat both parties fairly.
  • Not knowingly represent one party to the detriment of the other.
  • Disclose facts each party needs to make an informed decision.
  • To assist, as the Buyer and Seller are empowered to negotiate on their own behalf.
  • Assure confidentiality on each party’s price, terms and personal information.


Buyers and sellers have an option when the real estate brokerage firm is a dual agent. That option is called designated agency. In designated agency, the real estate brokerage firm will designate a salesperson to represent the buyer and another salesperson to represent the seller.

The designated buyer’s agent will act as an agent for the buyer as described in “buyer agency” above. The designated seller’s agent will act as an agent for the seller as described in “seller agency” above. This is the case even though each of the salespeople are from the same real estate brokerage firm.

The seller and the buyer must each agree to having a salesperson designated for them, and the real estate brokerin charge of the brokerage firm must make the designation.



  • A person is Unrepresented by a real estate agent unless he or she has signed a representation agreement with that agent.
  • The real estate agent cannot provide advice or counsel to an Unrepresented Person on matters pertaining to real estate, including real estate financing.
  • An Unrepresented Person has the responsibility to protect his or her own interests.
  • All real estate agents are obligated by law to treat all parties to a real estate transaction honestly irrespective of whom they represent in the transaction.