Working With Real Estate Agents in North Carolina

The relationship between a real estate agent and the buyer or seller who hires the agent is referred to as an agency relationship, because the real estate agent acts on behalf of — i.e., as an agent for — the buyer or seller (the "client"). In an agency relationship, the agent has certain duties and responsibilities to their client.

An agency agreement is a contract between you and a real estate firm that authorizes the firm and its agents to represent you. The agreement between a buyer and an agent is typically called a "Buyer Agency Agreement"; between a seller and an agent, a "Listing Agreement." Read and understand it before you sign it — if you do not understand it, ask the agent to explain it, and if you still do not understand it, consider consulting an attorney before signing. Your agent must give you a copy of the agreement after you sign it.

No. The term of an agency agreement is negotiable. Real estate agents are allowed to determine their own policies for how long their agency agreements run. A prospective buyer or seller may request a different length of time than the one proposed; if no agreement can be reached, the buyer or seller may seek another agent willing to agree to a different term. Every agency agreement must have a definite expiration date.

No. The amount or percentage of an agent's compensation is negotiable. Real estate firms set their own compensation policies. A prospective buyer or seller may request a different fee, and if no agreement can be reached, may seek another agent willing to agree to a different fee.

When buying real estate, you have several choices for how you want a real estate firm and its agents to work with you: you may want them to represent only you (as a buyer agent), you may be willing for them to represent both you and the seller at the same time (as a dual agent), or you may work with a firm that represents only the seller (as the seller’s agent or subagent). Some firms will offer you a choice among these; others may not.

If a real estate firm and its agents represent you, they must promote your best interests, be loyal to you, follow your lawful instructions, provide you with all material facts that could influence your decisions, use reasonable skill, care, and diligence, and account for all monies they handle for you. Once you have agreed — orally or in writing — for a firm and its agents to be your buyer agent, they may not give confidential information about you to sellers or their agents during the relationship without your permission. Until that agreement exists, avoid telling any agent anything you would not want a seller to know.

To be sure you and the firm have a clear, shared understanding of the relationship, you may want a written agreement from the start of working with an agent — though some firms will assist a buyer without one initially. If you decide to make an offer to purchase a particular property, the agent must enter into a written agency agreement with you before making a written or oral offer on your behalf. Without a signed agreement, the agent can no longer represent or assist you and is no longer required to keep your information confidential.

Whether the agreement is written or unwritten, a buyer agent may perform a number of services for you, including helping you find a suitable property, arrange financing, learn more about a property, and otherwise promote your best interests. With a written agreement in place, the agent can also help prepare and submit a written offer to the seller.

A buyer agent can be compensated in different ways. You may pay the agent directly out of pocket, or the agent may seek compensation from the seller or listing firm first and require you to pay only if that is refused. Whatever the arrangement, it should be clearly stated in a buyer agency agreement before you make an offer, and you should carefully read and understand the compensation provision before you sign.

You may permit an agent or firm to represent both you and the seller at the same time. This "dual agency relationship" arises if you become interested in a property listed with your own agent’s firm. Any agreement permitting dual agency must be put in writing no later than the time you make an offer to purchase, and both you and the seller must consent to it in writing.

Dual agency creates a potential conflict of interest, since the firm's loyalty is divided between you and the seller. It is especially important to have a clear understanding of your relationship with the firm and all of its individual agents, since all of them are dual agents in that transaction. A dual agent must treat both parties fairly and equally and cannot help one gain an advantage over the other. Buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party.

Some firms offer "designated dual agency," where one agent in the firm represents only the seller and a different agent represents only the buyer — each more fully representing their own client, with confidential information walled off between them, while the firm as a whole remains in dual agency. Under designated dual agency, the agent assigned to represent the buyer is prohibited from disclosing that the buyer may agree to a different price or terms than proposed, the buyer’s motivation for buying, or any information the buyer has identified as confidential, unless otherwise required by statute or rule.

If your buyer agency agreement expires after you have entered into a contract to purchase a property, your agent may continue representing you through the closing, and you may still owe compensation under the agreement’s terms. If you are not under contract when the agreement expires, your agent must immediately stop representing you unless you enter into a new buyer agency agreement.

Yes. If the agent or firm you contact does not offer buyer agency, or you do not want to be represented, you can still work with that firm and its agents — but they will be acting as the seller's agent or subagent, not as your agent. That agent must still be fair with you and disclose "material facts" about the property (defects such as a leaky roof), but represents the seller, not you, and cannot advise you on price or negotiate on your behalf if doing so would conflict with the seller's interests. Agents must tell you in writing if they represent the seller before asking you anything that could help the seller — until you are sure who an agent represents, avoid saying anything you would not want a seller to know.

Unless you agree otherwise, a seller's agent is compensated by the seller.

No. While hiring an agent may benefit you, there is no law requiring a buyer to hire a real estate agent to buy real estate.

Maybe. An agency agreement is a contract between a buyer or seller and a real estate firm, and most agreements do not contain a provision allowing either party to terminate before it expires without the other’s consent. Generally, one party cannot end the agreement unilaterally. If you and the firm agree to terminate, both should sign a written agency termination agreement. If the firm asks for compensation in exchange for an early termination, you may agree, disagree, or negotiate the amount — and if an agreement contains a penalty or fee for early termination, that provision must be stated in a clear and conspicuous manner. If you cannot reach agreement on termination, you may consult your own attorney or simply wait until the agreement expires on its own. The Real Estate Commission does not have authority to terminate agency agreements or to force an agent to terminate one.