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Remember when buying a house meant a handshake, a listing in the Sunday paper, and an agent working out of a card table in the back of a strip-mall office with a bowl of hard candy on the desk? Those days are as gone as your old 8-track player. These days there’s an actual legal term for who’s really on your side, and it’s called an agency relationship. It sounds like something out of a Cold War spy novel, but stick with me, getting this wrong can cost you real money, and unlike that 8-track of Fleetwood Mac, you can’t just flip it over and fix it.
Agency relationship is just a fancy way of describing who your real estate agent legally works for, and how they’re allowed to represent you when you buy or sell.
In Michigan, every agent is required to hand you a form before things get very far. It’s called the “Disclosure Regarding Real Estate Agency Relationships,” and it gets signed about as fast and carefully as a credit card receipt at a gas pump. Nobody reads it, everybody signs it, everybody moves on. I want to actually walk you through what it means, because it changes how you should play your cards in a real estate deal.
Traditional Agency vs. Designated Agency
The two office setups that matter most are “Traditional Agency” and “Designated Agency.” Think of it like the difference between calling the pharmacy and getting whoever’s behind the counter, versus calling and asking specifically for your own pharmacist who actually knows you’re allergic to penicillin.
Here’s traditional agency: every agent in that office works for the seller, even if you’re the buyer. You call the number on the yard sign, someone nice shows you the house, and congratulations, you’ve just unknowingly hired the entire office to fight for the seller, not you. Under the law, every other agent in that office is a “subagent” of the seller, meaning they’re on the seller’s team just like the listing agent. And it’s not just theoretical loyalty, those subagents are legally required to pass along anything you tell them to the seller if it could help the seller’s position. So that offhand comment about how you “could probably go a little higher”? That’s not staying between friends. It’s less “personal representation” and more “you called for backup and accidentally recruited the other army, and they’re taking notes on everything you say.”
Here’s designated agency: each agent is walled off from the others, like contestants on The Price Is Right who aren’t allowed to lean over and whisper the actual retail value of the Showcase Showdown to each other. You call the office and talk to any agent other than the listing agent, and by law, that agent works only for you, keeping your business private, even from their own coworkers down the hall. That’s why it’s called “designated”: the agreement names your specific agent, and that agent can only loop in their supervisory broker, not the listing agent, no matter how friendly they are at the office birthday party.
Knowing which setup you’re dealing with matters before you say a single word about your top price, your moving timeline, or why you’re really selling the house the kids grew up in (and left their bikes in the garage of for the last twelve years).
So Who Are the Players? Here’s What Each One Actually Means
Seller’s Agent: Under Michigan law, a seller’s agent works under a listing agreement with the seller and acts solely on the seller’s behalf. This is the agent whose name is on the yard sign. Their job is to get the seller top dollar, full stop. If you’re the buyer chatting up the seller’s agent, they’ll be warm, they’ll be helpful, they’ll remember your dog’s name — and they are still not on your team, the same way the blackjack dealer is friendly but isn’t quietly hoping you hit 21.
Buyer’s Agent: A buyer’s agent works under a buyer’s agency agreement and acts solely on your behalf if you’re the one purchasing. They negotiate for you, keep what you tell them confidential, and work to get you the best price and terms, and just like sellers get from their side, you get the benefit of your agent passing along anything they learn about the seller’s situation that could help you. This is the relationship most people assume they automatically have the second they pick up the phone, and as we just covered, that’s only true if you’re actually working with a designated agent, not just whoever grabbed the phone at the listing office.
Dual Agent: Here’s where it gets interesting. One licensee can represent both the buyer and the seller in the same deal, but only if both sides know it and agree to it in writing. Here’s the catch, straight from the disclosure form: a dual agent legally cannot tell either side everything they know, and can’t provide the full effort they’d normally owe a client. Picture a referee who’s somehow also suited up and playing for both teams, they have to call it straight down the middle, which means nobody’s getting a teammate who’s fighting purely for them. Nothing shady about it; it’s just what the law requires once an agent is standing in the middle of the court.
Transaction Coordinator: This one throws people the most, mostly because “transaction coordinator” sounds like a job title from a corporate seminar you’d fall asleep in. A transaction coordinator isn’t representing the buyer or the seller at all. They’re a licensee keeping the paperwork, deadlines, and inspection contingencies moving so the deal actually closes, kind of like the person who keeps the family reunion running on schedule but technically married in and isn’t related to anybody by blood. Because they don’t represent either side, they don’t owe either party the loyalty an agent owes a client.
You’ll see transaction coordinators most often with FSBO sales, that’s “For Sale By Owner,” when a seller decides to skip listing with an agent entirely and sell the house themselves, yard sign, open house, and all the paperwork nobody warned them about. A FSBO seller usually still wants a licensed professional making sure the purchase agreement, disclosures, and deadlines are done correctly, they just don’t want to pay for, or don’t need, someone negotiating on their behalf. So they’ll typically hire a transaction coordinator to shepherd the paperwork through to closing, without handing over full representation. Think of it as hiring someone to make sure you file your taxes correctly without hiring them to argue with the IRS on your behalf.
Why This Actually Matters
If you haven’t bought or sold a home since your living room had shag carpet and a rotary phone bolted to the kitchen wall, here’s the headline: the rules, the paperwork, and honestly the whole process have changed more than you’d expect. Before you say anything you wouldn’t want repeated to the other side, your real top price, why you need to move fast, what you’d actually settle for, know exactly who you’re talking to. Just ask: “Who do you represent in this transaction?” It’s a perfectly normal question, not an accusation, and any agent worth their commission will answer you straight. That one question tells you whether the person across the table is in your corner, the seller’s corner, or standing politely in the middle refusing to pick a side, like a Thanksgiving guest avoiding a political conversation.
This column is for general education only and isn’t a substitute for reading the actual Disclosure Regarding Real Estate Agency Relationships form you’re given, or for legal advice from a licensed attorney. Agency laws and definitions can vary by state. The descriptions above apply specifically to Michigan.
Daniel Dwyer-Snyder, Associate Broker with CENTURY 21 Signature Realty. I can be reached at 989-708-1845.
