Client vs Customer in Real Estate: What’s the Difference?

 

In the real estate industry, the terms client and customer are often used interchangeably — but legally and professionally, they mean very different things. Understanding this distinction is crucial for real estate agents and anyone involved in a property transaction, as it defines the nature of the relationship, the level of service provided, and the agent’s fiduciary duties.

What Is a Client in Real Estate?

A client is someone who has signed a formal representation agreement with a real estate agent or broker. This agreement establishes an agency relationship, which legally binds the agent to act in the best interests of the client.

Key Characteristics of a Client:

  • Has signed a listing agreement (seller) or buyer representation agreement (buyer).

  • Is owed fiduciary duties by the agent.

  • Receives full representation, including advice, negotiation, confidentiality, and loyalty.

Fiduciary Duties Owed to Clients:

  1. Loyalty – Always act in the client’s best interest.

  2. Confidentiality – Keep the client’s information private.

  3. Disclosure – Share all material facts.

  4. Obedience – Follow lawful instructions.

  5. Reasonable care and diligence – Provide competent service.

  6. Accounting – Keep proper track of all money and documents.

Example:

A homeowner signs a listing agreement with an agent to sell their property. That seller is now the agent’s client, and the agent must prioritize their needs.

What Is a Customer in Real Estate?

A customer is someone involved in a real estate transaction who has not entered into a formal agency agreement with the agent. While the agent may still assist them, they do not owe fiduciary duties — only fair and honest treatment.

Key Characteristics of a Customer:

  • Has not signed a representation agreement.

  • May receive limited services (e.g., property showings, answering questions).

  • Is owed honesty and fairness, but not full loyalty or confidentiality.

Duties Owed to Customers:

  • Honesty

  • Integrity

  • Disclosure of known material facts

Example:

A buyer walks into an open house hosted by an agent representing the seller. Unless the buyer signs a buyer's agreement, they are simply a customer — not a client — and the agent's loyalty lies with the seller.

Why the Distinction Matters

For Agents:

  • Legal and ethical obligations vary depending on whether someone is a client or a customer.

  • Providing confidential advice or negotiating for a customer can lead to a conflict of interest or legal issues.

For Buyers and Sellers:

  • Knowing your status helps you understand what services you’re entitled to.

  • If you want full representation, you must sign a formal agreement to become a client.

Dual Agency and Transaction Brokerage

In some cases, an agent might represent both parties (known as dual agency) or act as a neutral facilitator (transaction broker). These roles further complicate the client vs. customer relationship and are governed by local laws and brokerage policies.

Conclusion

The difference between a client and a customer in real estate is more than just terminology — it defines the relationship, the level of service, and the legal responsibilities involved. Whether you’re a buyer, seller, or agent, understanding this distinction is essential for ethical and effective real estate transactions. If you want personalized guidance, always ask your agent to clarify whether you are being treated as a client or a customer — and don’t hesitate to formalize the relationship if you want full representation.

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