Types of agency 4

To understand how we interact with people in this business, you have to look at the history. For a long time, real estate operated under the rule of Caveat Emptor, or "Let the Buyer Beware." It meant the buyer was on their own to figure out if the house was a good deal or a lemon. While we have more consumer protection laws now, this concept gives us the distinction between a Customer and a Client. A Customer is someone you deal with at "arm's length"—you are honest and fair, but you keep your distance and don't fight for them; you work with them. A Client, however, is your Principal. You enter a fiduciary relationship with them, meaning you protect them and fight for their best interests; you work for them.This distinction gets tricky when we look at Dual Agency and Subagency. Dual Agency is when a broker tries to represent both the buyer and the seller as a fiduciary in the same transaction. This is considered a major conflict of interest—how can you fight for the highest price for the seller and the lowest price for the buyer at the same time? Because of this impossibility, Dual Agency is illegal in Florida residential transactions. Instead, the law relies on Subagency. This defines the chain of command: the sales associate is an agent of the Broker, and the Broker is the agent of the Principal. By extension, the associate acts on behalf of the Broker and owes the same duties to the Principal that the Broker does.