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Agency, How Does It Work?

Agency – How does it work?                                                                                                    

Agency can be a bit confusing.  Each state is different, but this blog should quickly explain how it works in MN so you’re prepared when the time comes to buy or sell!

First, technically, when you sign any representation contract with a real estate agent, your agreement is with that agent’s broker.  The real estate broker is charged with overseeing and regulating his/her entire brokerage of agents.  He/She holds all the licenses for every agent working at the brokerage.  This is key to remember when we get to dual agency.

Listing Agent

When a seller employs an agent to sell their home, the agent becomes the “listing agent”.  Simply put, they are tasked with guiding the seller on pre-market projects, formulating a marketing plan, following through on that plan, answering any questions and putting out any logistical fires along the way!  If an agent from another company brings a Buyer, the listing agent is allowed to use their experience and expertise on the seller’s behalf in negotiations.

Buyer Agent

When a buyer employs an agent to show them homes and help them procure the right one, the agent becomes the “buyer agent”.  This agent should be available to their client and quick to communicate as homes are often snatched up quickly when they hit the market.  If a buyer agent brings a buyer on another company’s listing, he/she is allowed to use their experience and expertise to get the best deal for their client.

Dual Agency

This one is tricky, keep in mind that some states do it differently!  In Minnesota, whenever both sides of a transaction are represented by the same company (specifically the same managing broker), the listing agent and the buyer agent represent both parties together.  Sellers will still only meet and talk with the listing agent, buyers will only meet and talk with the buyer agent, but the agents both represent both buyers and sellers.  This limits what both agents can do on behalf of “their” client.  They can state material facts and answer any questions that don’t harm or diminish the other side’s position in any way.  They should be truly working in the best interest of both the buyer and seller.


A person can hire an agent to “facilitate” a transaction or portion thereof on their behalf.  The person isn’t being represented by that agent.  The agent, or facilitator, is employed to do a specific task for the person within the guidelines of the law and must provide confidentiality.   The facilitator isn’t “in your corner” as some might put it.  In the event that the facilitator is tasked with writing a contract for a buyer purchasing a home listed by the facilitator’s company, the facilitator may write the contract, but must act as the seller’s agent


I hope this blog helped you understand the complex workings of real estate agency.  It might be confusing, but its purpose is to clearly define responsibilities and protect the consumer’s interests. 

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