Buyer vs Seller Representation on the Indiana Real Estate Exam

Last updated: April 2026

Understanding the legal and ethical distinctions between buyer and seller representation is one of the most critical components of passing your state licensing exam. In Indiana, agency law is governed by specific statutes that dictate exactly how real estate professionals must interact with consumers. Because a significant portion of the licensing exam focuses on these relationships, mastering the nuances of Indiana agency law is essential for your success.

Whether you are drafting a listing agreement or showing properties to a prospective buyer, the Indiana Real Estate Commission (IREC) requires you to strictly adhere to statutory duties. For a comprehensive overview of all exam topics, be sure to review our Complete Indiana Exam Guide.

The Foundation of Agency Law in Indiana

In many states, agency relationships must be explicitly established in writing before any representation begins. However, Indiana operates under a presumption of agency. According to Indiana Code (IC) 25-34.1-10, a licensee is presumed to represent the consumer they are working with unless there is a written agreement stating otherwise.

This means if you are showing homes to a buyer, Indiana law presumes you are their buyer's agent, owing them full statutory duties, even if they haven't signed a formal buyer agency agreement. Understanding this default position is a frequent testing point on the Indiana real estate exam.

Statutory Duties Owed to Clients

While many national textbooks teach the acronym "OLD CAR" (Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care) for common law fiduciary duties, Indiana has replaced common law agency with specific statutory duties. When representing either a buyer or a seller, an Indiana broker must:

• Fulfill the terms of the agency relationship made in writing.
• Disclose the nature of the agency relationship.
• Promote the interests of the client with absolute fidelity.
• Maintain confidentiality (which survives the termination of the agency relationship).
• Account for all money and property received.
• Exercise reasonable care and skill.

Seller Representation (Listing Agency)

When you represent a seller, you act as the listing agent. Your primary objective is to market the property, negotiate the highest possible price, and secure the most favorable terms for the seller.

Key Responsibilities of a Seller's Agent

In a seller agency relationship, your statutory duties require you to:

• Seek a price and terms acceptable to the seller: You must present all offers and counteroffers immediately, even if the property is already under contract.
• Advise the seller on pricing: You are expected to provide accurate market data. For a deeper dive into how to price properties accurately, check out our Indiana Comparative Market Analysis Guide.
• Disclose material facts: While you must advocate for the seller, you are legally obligated to disclose any known adverse material facts about the property's physical condition to prospective buyers.

Exam Scenario: A seller tells you their basement floods during heavy rain, but they ask you not to tell anyone. As a seller's agent, you must inform the seller that Indiana law requires the disclosure of known material defects. Obeying the seller's request to hide this fact would violate the law. Additionally, you must ensure all marketing and client interactions adhere strictly to fair housing laws, as outlined in our guide on Indiana Protected Classes and Discrimination.

Buyer Representation

When representing a buyer, your role flips. Your objective is to help the buyer locate a suitable property and negotiate the lowest possible price and best terms on their behalf.

Key Responsibilities of a Buyer's Agent

As a buyer's agent, Indiana law requires you to:

• Seek a property with an acceptable price and terms: You must negotiate fiercely on behalf of the buyer's financial interests.
• Disclose adverse material facts: You must disclose any known adverse facts regarding the seller's ability to perform the contract or the property's condition.
• Maintain buyer confidentiality: You cannot disclose the buyer's motivation for buying, their maximum budget, or any other confidential information without written permission.

Exam Scenario: You are representing a buyer who loves a property listed at $300,000. The buyer tells you, "We will offer $280,000, but we are willing to go up to the full $300,000 if they counter." As a buyer's agent, you absolutely cannot disclose to the seller or the listing agent that your buyer is willing to pay more. Doing so violates your statutory duty of confidentiality.

Limited Agency in Indiana

One of the most heavily tested areas on the Indiana real estate exam is Limited Agency. Some states call this "Dual Agency," but Indiana statutes specifically use the term "Limited Agent."

A limited agent is a licensee who, with the written and informed consent of all parties, represents both the buyer and the seller in the same transaction. Because representing two opposing sides creates an inherent conflict of interest, the law restricts what a limited agent can do.

Limitations of a Limited Agent

A limited agent cannot disclose:

• That the buyer will pay more than the offered price.
• That the seller will accept less than the listed price.
• The motivations of either party for buying or selling.
• That a buyer or seller will agree to financing terms other than those offered.
• Any material or confidential information, unless required by law (like property defects).

To practice limited agency legally in Indiana, the broker must obtain a signed Limited Agency Agreement from both parties before showing the property or presenting an offer.

In-House Agency Relationships

Indiana law distinguishes between a single agent acting as a limited agent and two agents from the same brokerage representing different parties. This is known as In-House Agency.

If Broker A represents the seller and Broker B represents the buyer, and both work for the same Managing Broker, Indiana law does not consider Broker A and Broker B to be limited agents. They can continue to fully represent their respective clients. However, the Managing Broker becomes a limited agent because they oversee both sides of the transaction. This arrangement is only legal if the brokerage has a written office policy permitting in-house agency.