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Understanding Agency in Minnesota Real Estate
Dated: April 5 2023
Whether you're buying or selling a property in Minnesota, understanding the concept of agency is essential to making informed decisions and protecting your interests. In this blog post, we will explore what agency means, the different types of agency relationships that exist, and some important legal and ethical considerations to keep in mind.
When you work with a real estate professional in Minnesota, you are entering into an agency relationship. Your Realtor is legally required to explain agency to you at your first substantive contact, which means before you provide them with any confidential information. Agency refers to the legal and ethical relationship between a real estate agent and their client. The agent is obligated to act in the best interests of their client and provide them with certain fiduciary duties, such as loyalty, confidentiality, disclosure, accounting, and obedience.
There are three main types of agency relationships that exist in Minnesota real estate: seller's agency, buyer's agency, and dual agency.
Seller's agency is the most common type of agency relationship in Minnesota. In this relationship, the agent works exclusively for the seller and is obligated to act in their best interests. The agent will market the property, solicit offers, and negotiate on behalf of the seller. The agent will owe the seller fiduciary duties and must keep any information about the seller confidential.
Buyer's agency is another type of agency relationship that exists in Minnesota. In this relationship, the agent works exclusively for the buyer and is obligated to act in their best interests. The agent will assist the buyer in finding suitable properties, provide them with information about the properties, and negotiate on their behalf. The agent will owe the buyer fiduciary duties and must keep any information about the buyer confidential.
Dual agency is a less common type of agency relationship in Minnesota. In this relationship, the agent represents both the buyer and the seller in the same transaction. This means the agent owes fiduciary duties to both parties, but those duties are limited. The agent cannot disclose confidential information about either party to the other and cannot provide advice or advocacy to either party. Dual agency is legal in Minnesota, but it requires informed written consent from both the buyer and the seller.
It's important to note that agency relationships can be created in different ways. In some cases, they may be established through a written contract, such as a listing agreement or a buyer representation agreement. In other cases, they may be established through verbal or implied agreements, such as when a buyer works with an agent they meet at an open house.
To sum up, understanding agency is crucial when buying or selling a property in Minnesota. The three types of agency relationships that exist are seller's agency, buyer's agency, and dual agency. Each of them has its own obligations and limitations, and it's important to work with a trusted and knowledgeable real estate professional who can guide you through the agency relationship and help you achieve your goals. If you're looking for a reliable real estate agent in Minnesota, I would love to have a conversation with you!
I Hope this article has been helpful, and don’t forget to follow us for more MN real estate tips!
I am a professional real estate agent licensed in the State of Minnesota, I am committed to providing only the highest standard of care as I assist you in navigating the twists and turns of home owner....
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