AGENCY RELATIONSHIPS
If you leave the agency question "as-is", your Agent will automatically represent the seller in the transaction. If the agent does not represent the seller, you can opt for buyer agency. If the house in which you are interested is listed by the same broker as your agent, then you have an automatic dual agency situation. To sum it up, if you want full representation and it is available, insist on buyer agency.
One of the most common misconceptions is that when working with a realestate agent, he or she will "automatically" represent you as a buyer. Unless this is specifically disclosed in writing, the agent is representing the seller.
The traditional relationship has been that a real estate agent's primary loyalty was to the seller of the property. This relationship was in effect whether the agent was the listing agent or working with a buyer. This situation caused many home buyers to be confused: they assumed that the agent that had been driving them around showing them houses for the last 3 weeks was representing them. In reality, the agent was representing the owners of the houses they saw, and was bound to reveal to those owners any information he or she knew about the buyers.
Buyer agency has changed all that. The buyer now has a choice in representation: the agent with whom they were working could continue to represent the seller in the transaction, or the agent could represent them as buyers. The buyer is now able to compete on a more level playing field.
The following is a summary of the types of agency, and who the agent represents.
SELLER AGENCY
The "default" situation. Unless disclosed to the contrary, all agents involved in a real estate transaction (and their brokers--with whom a listing agreement is actually with) represent, and owe their allegiance, to the seller. If you contact an agent who has a property listed, that agent will always represent the seller.
BUYER AGENCY
When an agent represents the buyer, that agent "rejects" the implicit seller agency and thus owes loyalty to the buyer. Simply put, it allows the agent with whom you are working to be your representative and to put your interests above all others.
DUAL AGENCY
This occurs when 2 agents--or the same agent--working for the same broker each represent a buyer and a seller in a transaction. This situation must be disclosed to both the buyer and the seller. Privileged information (e.g. the price that a buyer will pay or a seller will sell at) cannot be disclosed to both the buyer and the seller. Privileged information (e.g. the price that a buyer will pay or a seller will sell at) cannot be disclosed to the other party without the express permission of that party.