Homeownership

The Agency Mess

Home Buyer and Seller Confusion and Costs Related To Diverse and Poorly Enforced State Laws about the Role and Responsibility of Real Estate Agents

For many years, a large majority of home buyers and sellers have worked with real estate agents. Most consumers believe that these agents always or almost always are required to represent the interests of the home buyer or seller with whom they are working. Yet, real estate agents often are not required by law to represent the interests of the buyer or seller with whom they are working, and many do not. In reality, there are a number of different types of relationships allowed in most states between real estate agents and their clients. This report discusses consumer confusion about agent representation, the sources of this confusion, how the confusion harms consumers, and how law reform and better enforcement could reduce the confusion.  It also provides advice to home sellers and buyers about how to protect themselves given diverse and poorly enforced state laws on agency.

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