Breaking Down Real Estate Relationships

The goal of this blog post is to help you understand the relationships between the buyer and the real estate broker or the seller and the real estate broker in the state of Georgia. These are known as real estate relationships. You as a buyer, seller, or tenant can make informed choices and decisions on how best to work with a real estate broker.

Real estate brokers are licensed professionals who are trained to help consumers buy, sell, or lease a property

As a general rule, only licensed real estate brokers can be paid a fee to help consumers buy, sell, or lease a real estate property.

The agent who you are working with is acting on behalf of the broker. Most agents are independent contractors and very rarely are employed by the broker.

In the majority of the real estate transactions, the consumer interacts only with his or her real estate agent and not the real estate broker directly. 

All brokerage relationships in Georgia fall into one of two categories: Broker-Client Relationship or Broker-Consumer Relationship.

All relationships in the State of Georgia must be in writing and explain: the type of representation, how the broker will be paid, and the duty of the broker to the buyer, seller, or tenant.

What is the Best Option for You? Let’s break it down and explain.





A prospective buyer may be best served as a CLIENT when he or she:

• Wants/needs advice and counsel on real estate purchases

• Is a person who relies on input from the salesperson. (“What would YOU suggest?”)

• Desires professional assistance in negotiating

• May have special financing needs

• Is a cautious analytical buyer

• May be a corporate or out of town buyer or first time home buyer

A prospective buyer MUST be a CLIENT when he or she:

• Has a material relationship with the Agent (relative, close friend, business associate)

• Has confidential information that needs to be kept confidential

• Wants anonymity

• Wants representation

Real Estate Agents work FOR a CLIENT as a Buyer’s Agent


A prospective buyer may best be served as a CUSTOMER when he or she:

• Wants freedom to work with several agents

• Merely needs exposure to properties

• Is familiar with real estate practices/procedures for this area

• Knows how to structure an offer to purchase

• Desires to negotiate for himself/herself (just needs agent to present offers)

• Desires to analyze the property and the legal forms (or engage the services of someone who can)

Real Estate Agents work WITH a CUSTOMER in a non-agency relationship


1. Be honest with Seller, but owe a greater responsibility to Buyer using reasonable skill and care to promote Buyer interest.

2. Disclose to Buyer client any pertinent facts that could help Buyer client buy at the best price and terms such as:

• Property overpriced

• Other properties available at a better buy

• Negative features - busy street, steep drive, etc.

• Other situations that may affect the property value such as rezoning, proposed shopping center, etc.

• Seller near bankruptcy or foreclosure

3. Refrain from disclosing, without the client's written consent, any information regarding Buyer client’s position that would weaken Buyer’s ability to obtain best price unless said information is required by law.

4. Advise and strategize with the Buyer client concerning offers, counter offers.

5. Negotiate in buyer client’s behalf to secure the best price and terms.

6. To keep confidential even after expiration, all information received during the course the brokerage engagement, unless the Buyer client permits by writing, law requires or information becomes public from a source other than broker.


• Locate properties from our inventory and from the multiple listing services and show properties that meet buyer’s expressed needs.

• Provide factual information regarding property values, property specifications, neighborhoods, city and county services, schools, shopping facilities, places of worship, medical facilities and all such similar services so that buyer customer can make an informed buying decision.

• Disclose all material adverse facts actually known by seller and/or broker pertaining to the physical condition of the property, including but not limited to material defects in property, environmental contamination and any facts required by statute or regulation.

• Locate lenders, inspectors, attorneys, appraisers, surveyors and insurance services.

• Prepare an offer at buyer customer direction, and convey it to the seller.

• Bring the transaction to a successful close.

Let’s go even deeper and go over the different types of agencies in the State of Georgia.

Buyer-Client Relationships:

1. Seller Agency/Landlord Agency: when the real estate broker is representing the sellers in selling their property. By entering into a written contract known as listing agreement, a listing agency is created.

It gives the broker permission to market the property for sale for a specific price and for defined period of time. Normally, if the broker is successful to find a ready, willing and able buyer to purchase the property, the listing broker will be paid a compensation upon the closing of the transaction unless is negotiated differently in writing.

The landlord agency is different in that the listing agent is helping the consumer to lease a property instead of selling the property.

2. Buyer Agency/Tenant Agency: when the real estate broker representing the buyer in a real estate transaction and assisting with locating and negotiating the terms to purchase the property suitable to the buyer. This agency is created when a buyer enters into buyer brokerage agreement aks buyer agency. The real estate broker can either be compensated by the seller even they exclusively represent the buyer, the seller’s broker can share portion of their commission( if seller agreed to it) with a buyer’s agent or the buyer pays a commission or fee directly to his/her broker.

The tenant agency is different in that the tenant agent is helping the consumer to lease a property instead of purchasing a property.

3. Designated Agency: when both agents work for the same broker in the same real estate transaction. Their broker may designate each agent to work exclusively and represent one party in this transaction. Each agent has a separate brokerage agreement with the party they represent and act as their exclusive representative.

4. Dual Agency: when both parties( buyer & seller) agree in writing to be represented as clients by one agent in the same transaction.

5. Sub-agency occurs when one broker appoints another broker as a sub-agent to assist the broker.

Ex. The listing broker appoints the broker working with the buyer as a customer as their sub-agent.

Broker-Customer Relationships:

1. Transaction Brokerage: this is when real estate broker assists both parties in a real estate transaction but don’t represents neither one of them, the broker treats them as customers, not clients and perform ministerial acts to either party, including the following: identifying property; providing real estate statistics & information; providing pre-printed real estate form contracts; acting as a scribe in the preparation of the contract forms; locating vendors such as lenders, inspector, appraisals, surveyors, etc.; identifying facilities such as schools, shopping centers, etc.

2. Brokers may help parties other than their clients by performing ministerial duties to the other party( the customer).

I hope this was helpful in explaining real estate relationships.
Also, most agreements have a non-satisfaction termination note in there.

Search For Your Perfect Home Now!

August 7, 2019

Violeta is a Licensed Real Estate Broker in the States of Georgia and Florida, and the Founder of The House Squad Real Estate SHOP. She has been actively selling real estate for over 15+ years and speaks 3 languages beside English. Her goal is to educate the public of their options, and how they can add more to their bottom line when buying, selling or investing in real estate.