Listing Your Property For Sale? Florida's Best-Kept Real Estate Secret

Listing agents explain to sellers that in residential sales, the Transaction Broker relationship is a limited form of representation in which a real estate agent can assist the seller, the buyer, or both by having all parties give up their rights to that agent’s undivided loyalty. An agent working under a Transaction Broker relationship does not represent either a seller or a buyer in a fiduciary capacity or as a single agent. Florida’s Transaction Broker relationship is described in Florida Statutes Chapter 475, Section 278.

It is interesting to note that unless another form of representation (Single Agent or No Brokerage) is specified by separate written disclosure, a Transaction Broker relationship is established between a seller and a listing agent's Broker when the Listing Agreement is signed, long before the property is even offered to potential buyers.

In Florida, all relationship agreements for residential real estate services are between a principal (seller or buyer) and the office's Broker, NOT with the individual real estate agent who will be dealing directly with the seller or buyer. Any form of brokerage relationship (Transaction, Single Agent, or No Brokerage) applies to all agents whose licenses are attached to that Broker and office.

Keep in mind that the sales commission received by a buyer's Florida real estate agent is paid by the seller. In the Listing Agreement the seller agrees to pay a negotiated total commission to the listing office at closing, which is then shared with the buyer's real estate agent's office. This is called a cooperative commission.

The Transaction Broker relationship does not require a separate written disclosure to principals in order to apply. All relationships between Brokers and sellers/buyers in Florida are automatically Transaction unless and until a separate written disclosure changes it. (That's the "best-kept secret" part.)

This is how the Florida Statutes (see the above link) describe Transaction Brokerage:

" (b) Presumption of transaction brokerage. — It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.

2) TRANSACTION BROKER RELATIONSHIP. — A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:

(a) Dealing honestly and fairly;

(b) Accounting for all funds;

(c) Using skill, care, and diligence in the transaction;

(d) Disclosing all facts that materially affect the value of residential real property and are not readily observable to the buyer;

(e) Presenting all offers and counter-offers in a timely manner, unless a party has previously directed the licensee otherwise in writing;

(f) Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or any other information requested by a party to remain confidential;

(g) Any additional duties that are entered into by this or by separate written agreement."

A Single Agent relationship includes the fiduciary duties of Loyalty, Obedience, and Confidentiality, while a Transaction Broker relationship does not. Transaction brokerage is non-fiduciary and involves "Limited Confidentiality" as mentioned above, which is a confusing concept to many sellers, buyers, and even real estate agents.

Listing Agreements indicating (or defaulting to) Transaction Brokerage establish the relationship with sellers. However, if buyers have not signed a Single Agent or No Brokerage agreement with their real estate agent's Broker, Transaction Brokerage status automatically extends to their representation relationship.

Local real estate Boards refer to Transaction Broker limited representation as “facilitating” the transaction and “assisting” both seller and buyer, which includes filling in some paperwork, arranging access for viewings and inspections, and referring both sides to attorneys or title companies for closing. Under a Transaction Broker relationship, buyers and sellers are referred to as "customers," not clients. Licensed Brokers who manage offices and Sales Associates often call this a "non-agency" relationship.

Transaction agents are expected to provide marketing services and property/market information in order for sellers and buyers to make an informed decision on their own. Providing negotiation suggestions and/or advice may be interpreted as overstepping the limitations of a Transaction Broker relationship.

Transaction agents can be viewed as neutral third parties helping both the buyer and the seller navigate a Florida real estate deal.

Real estate attorneys tell us that handling sales under Transaction Broker relationships reduces potential liability on Brokers, offices, and companies for agent errors and omissions. The majority of real estate agents in Florida operate as non-employee independent contractors to the companies where their licenses are attached.

One of the reasons Florida real estate agents like to operate within a Transaction Broker relationship is because it opens the door to handling both sides of the deal and receiving both seller-side and buyer-side commissions. To many of them, the "holy grail" jackpot is receiving commissions from both the seller side and the buyer side in the same transaction.

Unless established in writing through a separate Single Agent disclosure, Florida real estate agents do not work for individual sellers or buyers, they work to help complete the transaction for both parties.

When Transaction agents give sellers or buyers advice or opinions about whether an offered price is too low, whether or not to counter with different terms or price, or which side should pay for certain negotiable items, they may be overstepping the limits of their Transaction Brokerage relationships.

This could be interpreted as implied agency and is the basis for many misunderstandings (and sometimes lawsuits) between buyers, sellers, and their agents/Brokers. Speak with a Florida-licensed real estate attorney for details on agency relationships and implied agency.

Even when one Transaction agent handles the seller side, and a different one handles the buyer side, both agents are there as neutral parties to facilitate the transaction and assist (not advise) both the buyer and the seller. Either one may be creating implied agency by not adhering to the limitations of Florida's Transaction Brokerage relationship.

Being the default real estate brokerage relationship in Florida, Transaction Brokerage is valid, accepted, and works adequately when properly adhered to, then competently and ethically applied in actual practice. Issues and misunderstandings arise when one side (seller or buyer) feels that their interests have not been looked after or protected as well as they assumed or expected.

When interviewing real estate agents to handle your side of an upcoming deal, be sure to have each one discuss Florida's Transaction Broker, Single Agent, and No Broker relationships with you. Depending on how you would like your interests addressed, you should know the differences and have the opportunity to ask basic questions.

When you have legal questions, speak with a Florida-licensed attorney before making any decision that involves buying or selling real estate.

Editor's Note: Christopher Carter is NOT an attorney. He does not give legal advice. For interpretation and application to specific circumstances of anything you read in this article, you must speak with a Florida-Licensed attorney.

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