Transaction Broker
A transaction broker is a real estate licensee who facilitates a transaction between buyer and seller without representing either party as an agent, providing limited services while maintaining neutrality.
Exam Tip
Transaction broker = NO representation, neutral facilitator. Cannot advocate or share confidential info. Different from dual agency (represents both).
What is a Transaction Broker?
A transaction broker (also called a facilitator, intermediary, or non-agent) is a real estate licensee who assists both the buyer and seller in completing a transaction without establishing an agency relationship with either party. The transaction broker remains neutral and does not advocate for either side.
Key Characteristics
| Feature | Description |
|---|---|
| No fiduciary duty | Does not represent either party |
| Neutral facilitator | Assists both sides equally |
| Limited services | Helps with paperwork and process |
| No advocacy | Cannot negotiate on behalf of either party |
| Confidentiality | Must keep both parties' information confidential |
Transaction Broker vs. Traditional Agent
| Aspect | Transaction Broker | Traditional Agent |
|---|---|---|
| Representation | Neither party | One party (buyer OR seller) |
| Fiduciary duty | No | Yes |
| Advocacy | None - neutral | Full advocacy for client |
| Negotiation | Cannot negotiate for either | Negotiates for client |
| Confidential info | Keeps both sides confidential | Shares with own client |
| Loyalty | To the transaction | To the client |
Services Transaction Brokers Provide
| Service | Description |
|---|---|
| Paperwork assistance | Prepare contracts and forms |
| Communication | Relay information between parties |
| Process guidance | Explain steps and procedures |
| Scheduling | Coordinate inspections, appraisals |
| Factual information | Provide property data |
| Referrals | Suggest lenders, inspectors, etc. |
What Transaction Brokers Cannot Do
| Prohibited Action | Reason |
|---|---|
| Disclose motivation | Cannot reveal why party is buying/selling |
| Disclose price flexibility | Cannot share what party will accept |
| Advocate for terms | Cannot push for better deal for either |
| Provide opinions | Cannot advise on price or terms |
| Share confidential info | Cannot disclose either party's info to the other |
When Transaction Brokerage Occurs
| Situation | How It Arises |
|---|---|
| Default status | Some states make this the default relationship |
| Dual agency alternative | Used instead of dual agency in same-company deals |
| Consumer choice | Parties choose limited service option |
| In-house transactions | Same brokerage represents both sides |
Disclosure Requirements
| Requirement | Details |
|---|---|
| Written disclosure | Must explain transaction broker role |
| Before services | Disclosure before any substantive discussions |
| Signed acknowledgment | Both parties should acknowledge in writing |
| Clear explanation | Must explain limited nature of services |
States and Transaction Brokerage
Transaction brokerage laws vary by state:
| State Approach | Description |
|---|---|
| Permitted | Allowed as alternative to agency |
| Required option | Must be offered to consumers |
| Default status | Presumed unless agency established |
| Prohibited | Some states don't allow it |
Advantages and Disadvantages
| For Consumers | Consideration |
|---|---|
| Pro | May be lower cost |
| Pro | No conflict of interest |
| Con | No advocacy or representation |
| Con | No fiduciary protection |
| Con | Must negotiate for yourself |
Comparison: Transaction Broker vs. Dual Agent
| Feature | Transaction Broker | Dual Agent |
|---|---|---|
| Agency relationship | None with either party | Agent of BOTH parties |
| Fiduciary duties | None | Limited to both |
| Disclosure of info | Keeps all confidential | May share some info |
| State treatment | Often preferred over dual agency | Restricted or banned in some states |
Exam Alert
Transaction broker = NO agency relationship with either party. Provides LIMITED services (paperwork, process). CANNOT advocate, negotiate, or share confidential information. Compare to dual agency where broker represents BOTH parties (has fiduciary duties to both). Transaction broker is NEUTRAL; dual agent has limited loyalty to both.
Study This Term In
Related Terms
Dual Agency
Real EstateDual agency occurs when a single real estate agent or brokerage represents both the buyer and seller in the same transaction, creating a potential conflict of interest that requires disclosure and consent.
Agency (Real Estate)
Real EstateAgency is a legal relationship where a real estate agent (agent) is authorized to act on behalf of a client (principal) in a real estate transaction.