Real estate agency laws vary from state-to-state, but the principles are for the most part universal: agents must elect a form of agency when they begin working with a given client, and that election must be explicitly stated and acknowledged by their client. In Michigan, the state in which my company operates, every Realtor is legally required to have every client sign something entitled "Disclosure Regarding Real Estate Agency Relationships, a document that specifies the nature of the agency relationship between the Realtor and their client.

Here is an overview of the different types of agency relationships that exist within real estate:
Seller's Agent
A seller's agent acts solely on behalf of the seller. Seller's agents have a fiduciary responsibility to disclose to the seller known information about the buyer which may be used to the benefit of the seller. The duties that a seller's agent owes to the seller include:
Promoting the best interest of the seller
Fully disclosing to the seller all facts that might affect or influence the seller's decision to accept an offer to purchase
Keeping confidential the seller's motivations for selling
Presenting all offers to the seller
Disclosing the identities of all buyers and all information about the willingness of those buyers to complete the sale or to offer a higher price

Buyers Agent
A buyer's agent acts solely on behalf of the buyer. Buyer's agents have a fiduciary responsibility to disclose to the buyer known information about the seller which may be used to benefit the buyer. The duties that a buyer's agent owes to the buyer include:
Promoting the best interest of the buyer
Fully disclosing to the buyer all facts that might affect or influence the buyer's decision to tender an offer to purchase
Keeping confidential the buyer's motivations for buying
Presenting all offers on behalf of the buyer
Disclosing to the buyer all information about the willingness of the seller to complete the sale or to accept a lower price

Disclosed Dual Agent
A real estate licensee can be the agent of both the seller and the buyer in a transaction, but only with the knowledge and informed consent, in writing, of both the seller and the buyer. In such a dual agency situation the licensee will not be able to disclose all known information to either the seller or the buyer. As a dual agent, the licensee will not be able to provide the full range of fiduciary duties to the seller or the buyer.

Transaction Coordinator
A transaction coordinator is a licensee who is not acting as an agent of either the seller or the buyer, yet is providing services to complete a real estate transaction. The transaction coordinator is not an agent for either party and therefore owes no fiduciary duty to either party. The transactional coordinator is not the advocate of either party and therefore has no obligation to negotiate for either party. The responsibilities of the transaction coordinator typically include:
Providing access to and the showing of the property
Providing access to market information
Providing assistance in the preparation of a buy and sell agreement which reflects the terms of the parties' agreement
Presenting a buy and sell agreement and any subsequent counter-offers
Assisting all parties in undertaking all steps necessary to carry out the agreement, such as the execution of documents, the obtaining of financing, the obtaining of inspections, etc.
Having said all that, heres how it works in practice:
95%+ of the time, buyers are initially represented by agents functioning as buyers agents
99%+ of the time, sellers are initially represented by agents functioning as sellers agents
In situations where an agent ends up representing both buyer and seller in a single transaction, the parties usually have a discussion as to the agents agency affiliation. What happens MOST of the time is that the agent converts to a dual agency status, which both parties must acknowledge IN WRITING

I hope this helps further your understanding of real estate agency. For a more detailed discussion, please visit the Professional One Real Estate website. It is imperative that you fully understand exactly who your Realtor is representing BEFORE you enter into any negotiations involving real estate. What you dont know can absolutely hurt you!