Are You Truly Represented by Your Florida Real Estate Agent?

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Are you being represented by your real estate agent in Florida? Probably not.

We’ve talked about the ongoing real estate commission lawsuits and the controversy around sellers paying commissions to buyer agents. The primary argument in these cases is that some sellers felt it was unfair to pay a fee to the real estate agent who represented the buyer in the sale of their home.

Since then, the term “representation” has frequently come up in the media and in talking head videos just like this:

But are all buyers actually being represented? That depends.

Each state has its own laws governing the relationships between real estate agents and how consumers are represented. In the State of Florida, there are three possible relationships between real estate brokers and consumers:

The History of Agency Law in Florida

These agency relationships were established in Florida in the late 1990s to eliminate a practice known as Dual Agency. Dual agency occurs when a real estate brokerage firm represents both the buyer and the seller in the same transaction, creating an inherent conflict of interest.

To eliminate dual agency, Florida law introduced the role of the Transaction Broker. As a transaction broker, the real estate brokerage does not fully represent either the buyer or the seller—it acts merely as a facilitator.

Prior to July 2008, Florida real estate agents were required to provide potential home buyers and sellers with a mandatory Transaction Broker Disclosure. That disclosure explicitly stated:

“Parties are giving up their rights to the undivided loyalty of the licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.”

While a number of states offer transaction brokerage (sometimes called a facilitator or intermediary), it is not the dominant service relationship in most of those states. In Florida, however, transaction brokerage is the dominant service relationship.

The 2008 Law Change & Consumer Confusion

In July 2008, Florida amended its license law to establish Transaction Broker as the default agent role and eliminated the mandatory disclosure requirement. It is now legally presumed that all licensees are operating as transaction brokers unless a written disclosure for a Single Agent or No Brokerage Relationship is provided to a customer.

As a result, many sellers and buyers in Florida operate under the impression that they are being fully represented by the agent they work with. This issue was highlighted in a January 2022 report by the Consumer Federation of America (CFA). The report indicates that transaction brokerage in Florida is widespread but poorly understood by consumers, can impose unnecessary financial costs on buyers and sellers, and exposes home buyers and sellers to significant risks regarding property quality and price.

How Did Florida Get Here?

Until the early 1990s, most real estate agents in the United States operated under a sub-agency system where all agents—including those working directly with buyers—were legally obligated to represent the interests of the seller. Many buyers found this arrangement unfair, leading to litigation and public backlash. Consequently, the National Association of Realtors determined the sub-agency system was no longer viable.

In 1998, the Florida Department of Real Estate and the Florida Legislature implemented new agency laws, formally establishing the Single Agent (fiduciary) and Transaction Broker (facilitator) relationships while outlawing dual agency.

At first, agents were required to provide customers an initial disclosure of non-representation, followed by a second disclosure specifying either Single Agent or Transaction Broker status. However, in the following decade, the statute was quietly amended to remove the requirement to disclose a transaction broker relationship, making transaction brokerage the automatic default.

Florida real estate brokers welcomed the removal of the disclosure requirement and the reduced liability associated with transaction brokerage, as it eliminates the strict fiduciary responsibilities required in single-agent relationships.

What the Data Shows Today

Today, the vast majority of residential real estate sales in Florida are handled under undisclosed transaction brokerage.

An analysis of 500 consecutive sales in Jacksonville, Florida in late 2021 by the Consumer Federation of America found that:

Due to the lack of required disclosures, consumer confusion is widespread. A poll commissioned by the CFA in December 2021 asked a representative sample of 286 Florida consumers:

“Do you think most home buyers and sellers in Florida work with a real estate agent who:”

1. Legally represents their best interests?
2. Legally represents the interests of the opposing party?
3. Legally represents neither party, but just facilitates the sale?

Nearly half of respondents (48%) mistakenly chose Option 1 (believing their agent legally represented their best interests), while 35% chose Option 3.

Transaction Broker vs. Single Agent

In a Transaction Broker or No Brokerage Relationship, the buyer or seller is treated as a customer, and the agent is a facilitator.

Under a Single Agent relationship, the buyer or seller is a client, and the agent is a fiduciary. A fiduciary relationship is a bond of trust and confidence where the broker places the client’s interests above all else—including their own.

Protecting Yourself in a Florida Real Estate Deal

If you are a seller or a buyer in Florida and you do not receive a written disclosure stating that you are entering into a Single Agent Relationship, you are not being fully represented. You are not legally entitled to undivided loyalty, full confidentiality, obedience, or full disclosure.

Before engaging the services of any real estate agent in Florida, ask one crucial question:

“Will you be representing me as a Single Agent or a Transaction Broker?”

Ultimately, the answer is determined by the designated broker supervising that agent. Agents operate under the license of a broker, and brokers are held legally responsible and liable for the actions of their agents.

Doiron Realty Services is a Single Agency Brokerage.