What type of agreements are usually signed by buyers and sellers when hiring a brokerage firm in real estate?

In real estate transactions, the relationship between buyers and sellers and their brokerage firms is commonly governed by fiduciary agreements. These agreements establish a fiduciary duty between the agent and the client, meaning that the agent is legally and ethically obliged to act in the best interest of the client. This includes duties such as loyalty, confidentiality, disclosure, and accountability to the client.

The fiduciary agreement is critical because it outlines the responsibilities the brokerage has to the client, ensuring that the client’s interests are prioritized in the real estate transaction. Such agreements help build trust and ensure that the client is aware of their rights and the obligations of the brokerage.

While other types of agreements, such as exclusive agency or special agency agreements, exist in real estate, they do not encompass the broader scope of fiduciary duties that a fiduciary agreement does. An implied agency agreement, on the other hand, arises from actions rather than a formal contract and may not provide the same level of clarity or protection for clients as a written fiduciary agreement.

Thus, the emphasis on fiduciary agreements captures the essence of the ethical and legal responsibilities that brokers hold towards their clients in real estate dealings.