Who is typically bound by a representation agreement?

A representation agreement is a legally binding contract that clearly outlines the relationship between a real estate broker and their client. In this context, the term "client" typically refers to the party who has formally engaged the services of the broker, which could be either a buyer or a seller, depending on the agreement's specifics.

The agreement establishes that the broker has a fiduciary duty to the client, which entails loyalty, confidentiality, and the provision of full disclosure. This means the broker is obligated to act in the best interests of the client in all transactions, providing them with advice, support, and access to information that is integral to making informed decisions in the real estate market.

The client, on the other hand, agrees to work exclusively with the broker during the term of the agreement and may also agree to compensation terms. This mutual commitment further emphasizes the importance of the relationship established by the representation agreement, which is designed to protect both parties' interests and ensure that the transaction process runs smoothly.

The other options do not adequately reflect the nature of this relationship. While brokerages provide the contextual and legal framework, they aren't singularly bound by the agreement without the broker's involvement. Buyers alone are not the only parties bound since the broker's obligations extend