Agency -- A Primer


Agent—“One who acts or has the power to act for another.”1 and 2  “[T]he individual who hires the agent and delegates to the agent the responsibility of representing their interests” is the Principal or the Client but the term Client “is also used when a broker represents someone in a relationship other than an agency.”1 

Creation of an Agency 

Implied Agency—Where “the actions of the parties imply that they have mutually consented to an agency relationship, an implied agency relationship is formed”1 

Express Agency—An ”agency relationship based on a formal agreement between the parties” is an express agency. “The agreement may be either oral or written, unless a written agreement is required by law.”1 In Virginia, “[a]s of July 1, 2012, all brokerage agreements must be in writing.”2 

Types of Agency—“An agency relationship can be classified based on the extent of the agent’s authority.”1 

Universal Agent—“[A] person empowered to do anything the Principal [client]  could do personally”1 is a Universal Agent. 

General Agency—A person who represents “the Principal in a broad range of matters related to a particular business or activity is a General Agent.”1 

Special Agency (Limited Agent)—A person authorized to represent “the Principal in one specific act or business transaction only, under detailed instructions.”1 

How Many Parties You Represent 

Single Agency—Single Agency is where an “agent represents only one party to a transaction.”1 

Designated Agency—Designated Agency is where "a sales associate authorized by the broker to represent one party to a transaction, while a different sales associate in the same firm represents the other party to the transaction.”1 

Dual Agency—Dual Agency is “one in which an agent represents two Principals [clients] in the same transaction”1 

Who You Represent

Buyer/Tenant Agency (Selling Agent)—A real estate broker becomes an agent of the buyer/tenant when the objective is “to find property that meets the buyer’s specifications.”1    

Listing (Seller)/Landlord Agency—“A real estate broker becomes an agent of the seller/landlord by entering into a listing agreement for the seller’s/landlord’s property.”1 

Further Distinctions in Virginia Law

Standard or statutory agency (full service agency)—“A licensee who acts for or represents a client in an agency relationship” in Virginia is a standard or statutory agent in Virginia.2   

Limited Service Agency—“A licensee acting only on the duties in a written brokerage agreement. . . .noting a list of the services that will be provided, along with a list of the duties required of a standard agent,” in other words, making clear the duties that are not being provided.2  “A limited service agent has all of the same responsibilities as a standard agent except I  the category of promoting the best interest of the client.”2 

Independent contractor—". . . a licensee who acts for or represents a client other than as a standard agent and whose duties and obligations are governed by a written contract between the licensee and the client” is an independent contractor in Virginia.2  “It is a form of representation, not agency.” This is distinguished from the use of the same term “where at least 75% of the compensation is based on commissions earned and the broker does not withhold payroll taxes.”2 “Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed.  Unlike an employee, an independent contractor pays for all expenses and Social Security and income taxes and receives no employee benefits.  Most real estate sales associates are independent contractors, . . .”1


1 Modern Real Estate Practice, 20th Edition, by FillmoreW. Galaty, Wellington J. Allaway and Robert C. Kyle with Martha R. Williams, JD, Contributing Editor, Dearborn Real Estate Education. 

2Virginia Real Estate Practice & Law, 12th Edition, Doris Borrelli, Contributing Editor, Dearborn Real Estate Education.