Agents, Brokers and Agencies
A real estate agent is licensed by the state to represent a homebuyer or a seller in a real estate transaction in exchange for a commission. Most agents work for a real estate broker, who also is licensed by the state to represent homebuyers and sellers in a real estate transaction. However, the broker usually must have more education and experience than agents and must adhere to stricter business licensing codes. The broker runs the office and is responsible for all of the listings and other financial details and processes involved with the real estate transaction.
Real estate agents and brokers follow agency rules that dictate their fiduciary duties to clients. Agency laws and regulations in the Philippines tend to share some basic principles: Agents are obligated to act in the best interest of the client, adhere to certain confidentiality clauses, and reveal all known material facts relevant to the transaction.
Agency can be further broken out into three basic categories: seller's agency, buyer's agency and dual agency.
The seller's agent works only for the seller and has no fiduciary duty to the buyer. The seller's agent works on behalf of the client to obtain the highest sale price and best sale terms possible.
The buyer's agent works only for the buyer and has no fiduciary duty to the seller, even if the agent is compensated with a percentage of the commission paid by the seller. The buyer's agent works on behalf of the client to obtain the lowest sale price and the best purchase terms possible.
With dual agency, the agent represents both the buyer and the seller so long as both parties consent to this arrangement. In this case, the buyer and seller must sign a dual agency disclosure statement that documents their consent. The dual agent may not disclose any confidential information, advocate or negotiate on behalf of either of the two parties.