Buying and selling real estate is complicated enough, but throw in more specific terms like special agent, universal agent, and you might as well call it a whole new language.
But don’t worry, these terms aren’t actually as complicated as they seem; in fact, they’re super simple.
Allow us to introduce you to one of the most important client-agency relationships in real estate, the special agent!
The Definition of Special Agents
There are a couple of different types of client-agency relationships when it comes to real estate selling.
To keep things simple, let’s say the responsibilities of these relationships become more and more specific as we go down the line.
Some federal and state laws require that a person interested in listing a site should have a special agent.
Right now, we’ll talk about special agents!
What Do Special Agents Do?
A special agent is a real estate agent hired to do a specific task or specific job by the client or the principal.
Note: A client and a principal are the same thing.
This is the most basic and important information you need to know about a special agent’s job.
Here’s a concrete picture:
- Suppose you hire a real estate agent to list your property.
- If this is the only thing they are employed to do, that makes them a special agent.
Tasks of a Special Agent
The special agent TAKES CHARGE and makes sure to prepare all the legal documents and necessary steps to sell your house.
He/she will also represent you to any and all interested buyers.
The relationship of a client or principal in this type of real estate agency is much more specific, more one-on-one than the other agency relationships.
For example, you’ve hired a listing agent to sell your house; you cannot expect them to help you buy a house as well. Listing and selling that site is their ONLY specific duty.
That is not part of the services a special agent should offer. If they are employed to sell a house, then they are ONLY selling.
After completing their specific task, their duty to the principal is complete, and they no longer employ the agent.
Allow Us to Give You a Clearer Example
Say you are a real estate agent. You’re talking to your neighbor and you find out they’re looking for a new home.
You have the authority to help them buy a new place.
Other pointers worth noting include:
- This type of agency makes you the person who deals with the paperwork that the principal has to sign at the end of the day.
- Once all the papers have been signed, all the business is complete, you’ve settled your new client’s home by law, you have finished your task and they no longer employ you.
This agency is a very simple and straightforward relationship.
On some occasions, you will find one agent that may represent both a seller and a buyer called dual agency.
TAKE NOTE: Dual agency is technically legal but we do ask you to take some caution before entering into this type of agency relationship because there is always going to be a natural conflict of interest.
Meaning that even though, yes, the agent is obligated to be transparent with you and have your best interest in mind the whole time – if they represent a buyer, they also have that person’s best interest in mind too.
Is A Special Agent Different from Another Real Estate Agent?
Now that we’ve gotten that out of the way, it’s pretty straightforward, isn’t it?
To make this even clearer let’s go over how the duties of other real estate agents differ from a special agent.
A universal agent acts on behalf of their clients, with full power.
When one is appointed, their services span BEYOND just listing a property.
This real estate agent’s authority stretches into the power of attorney meaning they can act as the principal party in legal matters.
Universal agents have the ability to purchase a property or act on a sale on their client’s behalf as an independent party.
Compared to different types of agencies, this agency relationship has the most power and authority.
A general agent can perform any and all acts related to ongoing business that the principal has appointed the general agent to act in.
Ok, so what does that mean?
Basically, the main difference is that general agents in real estate have a more limited scope to act or conduct their service in.
Where the universal agent can do pretty much anything and the special can only perform one service, the general agent in real estate is the middle ground version of this.
For example, if the company allows the agent to be a general agent, that means they can be hired on as buyer, seller, property manager, investor all at the same time.
This type of real estate agent has a little more freedom than your special but less than your universal agency.
You have a lot of different real estate agency relationships but the special agent relationship is the most simple by far.
Remember it’s only one task for one person to act on.
If you’re a buyer or seller, or an aspiring agent about to take the real estate exam, we hope this has been helpful for you!
Good luck on your real estate exam!