Agency is an issue in the farmland real estate business. There are folks out there who try to make you feel that they are on your side in a transaction but are they really? Sometimes I feel buyers and sellers do not fully understand agency. Agency to me is best explained with the use of a fence that divides buyer and seller. What side of the fence is the real estate agent standing on? A real estate agent in most states can work for the buyer, seller, or sometimes both. When representing both, the agent is standing on top of the fence with very little room to balance.
An agent for either the seller or buyer has common law fiduciary duties of care, obedience, loyalty, disclosure, accountability, and confidentiality. For example, an agent with a listing is working for seller. The agent’s job is to promote the interest of the seller. If the agent is working for the buyer, the responsibility of the agent is to promote the interest of the buyer.
Many states allow the agent to be a dual agent that represents both seller and buyer. Dual agency situations are best avoided if possible. Both the seller and buyer lose the ability to have someone working 100% towards their interest. The agent is also in a tough position and must be very careful when discussing the transaction. The agent cannot disclose any information that would hurt seller or buyer's position.
The states of Arkansas, Missouri, and Mississippi have great forms that explain agency. Below are links to these forms.
By Ted L. Glaub, Accredited Farm Manager, Accredited Land Consultant, Real Estate Broker, and Auctioneer at Glaub Farm Management. Serving Landowners in Arkansas, Mississippi, Missouri, and Tennessee.