With so many changes in our industry, and new definitions around “working with a buyer”, we wanted to provide a refresher on the different types of agency in Illinois. Illinois has three different types of agency relationships with consumers: No Agency, Designated Agency and Dual Agency. It is important to know that no matter which agency relationship you have with a client or consumer, all of them have a requirement of written disclosure or notice.
NO AGENCY
This person is not your client and you do not owe them fiduciary duties. You must disclose this non-agency relationship at the earliest opportunity in writing to prevent the consumer from sharing what they would perceive to be confidential information with you. As a seller’s agent, you might provide this No Agency Notice to an unrepresented buyer at an open house; or to an unrepresented buyer for a private showing.
FORM YOU CAN USE:
- NOTICE OF NO AGENCY NOTICE
DESIGNATED AGENCY
This is when a person is your client and you do owe them fiduciary duties. As a fiduciary, you owe the client care, obedience, loyalty, disclosure, accounting and confidentiality. When you are representing a client, you will need to disclose in writing that you are their broker.
FORMS YOU CAN USE:
- LISTING AGREEMENT
- EXCLUSIVE BUYER AGREEMENT
- NON-EXCLUSIVE BUYER AGREEMENT
DUAL AGENCY
Dual Agency is when you will be representing both parties in the same transaction and act as a fiduciary for both. Extreme care must be taken when this scenario presents itself, as there are a handful of steps and conversations that must be followed in a specific order. You will also be limited by the services that you can provide to each client.
Because the terms of the NAR settlement now require written buyer agreements with buyers you are working with, Dual Agency transactions require even more care than before to ensure you have a written agreement with your buyer that has clear terms for compensation that is objective and ascertainable. When acting as a Dual Agent, neither client is primary or more important than the other. If you have an established relationship with your seller client, and wish to also provide brokerage services to a buyer you met at an open house, and enter into a written agreement to do so, they are both equally your client and you owe equal fiduciary services to both.
FORMS YOU CAN USE:
- DISCLOSURE AND CONSENT TO DUAL AGENCY
- CONFIRMATION OF CONFIRMED CONSENT TO DUAL AGENCY