Education October 2, 2024

Understanding Real Estate Agency Agreements in Tennessee: The Role of a REALTOR®

If you’re considering buying or selling a home in Tennessee, it’s important to understand how real estate agency agreements work. These agreements define the relationship between you and your real estate agent. Knowing the basics helps you stay informed and ensures clear communication with your agent.

 

What is a Real Estate Agency Agreement?

A real estate agency agreement is a contract between you and a licensed real estate agent or brokerage. This contract explains what your agent will do for you, how they’ll be paid, and how they’ll represent you during the process. It sets expectations and protects both you and the agent.

 

Types of Agency Agreements in Tennessee

In Tennessee, there are different types of agency agreements. Let’s break them down:

  1. Seller’s Agent Agreement

In this agreement, the agent represents the seller. The agent’s job is to market the home, negotiate offers, and get the best deal for the seller.

  1. Buyer’s Agent Agreement

This agreement means the agent works for the buyer. The agent helps the buyer find a home, negotiates the price, and makes sure the buyer’s needs are met.

  1. Designated Agency Agreement

In Tennessee, a designated agent is appointed by their managing broker to represent only one party—either the buyer or the seller. Even if both parties use the same brokerage, each will have their own agent. This helps avoid conflicts of interest and ensures loyalty to their client.

  1. Dual Agency Agreement

A dual agency happens when one agent represents both the buyer and the seller. In this case, the agent must remain neutral and get permission from both sides. In Tennessee, dual agency must be fully disclosed.

  1. Facilitator (Transaction Broker) Agreement

A facilitator or transaction broker doesn’t represent either party but helps both complete the deal. This type of agent stays neutral and does not give specific advice to either the buyer or seller.

 

Key Parts of a Tennessee Agency Agreement

When you sign an agency agreement, keep these important details in mind:

  • Exclusive vs. Non-Exclusive Agreements: An exclusive agreement means you will only work with one agent. A non-exclusive agreement lets you work with more than one agent.
  • Compensation and Commission: This section explains how the agent will be paid, usually through a commission based on the sale price of the home.
  • Agent Responsibilities: The agreement will list what the agent will do for you, whether you’re buying or selling a home.
  • Time Frame: The agreement will include a time limit. Make sure it fits with your goals for buying or selling your home.

 

Why a Realtor is Important

A realtor’s knowledge of the Tennessee real estate market is valuable. They help with market trends, pricing, and legal details that might be hard to handle on your own. Realtors also make negotiations easier by acting as a middleman between you and the other party.

 

Conclusion

Understanding real estate agency agreements is key to a smooth transaction. Whether you’re buying or selling, a realtor can guide you through the process and ensure your needs are met.

If you’re ready to make a move in Tennessee, contact me today to learn more about the best agency agreement for you!