Buying or selling real estate is probably the most important and potentially rewarding
financial transaction you'll make in your life. So it is a good idea to take a
moment and consider the kind of relationship you might be entering into with a
REALTOR®. The more you know, the more satisified you will be with the results.
This information is provided to explain various types of agency relationships,
the collection, use and disclosure of personal information, and to help you understand
what it all means. If you are still unclear about theses concepts, feel free to
seek legal consel.
THE AGENCY RELATIONSHIP
REALTORS® work within a legal relationship
called agency. The agency relationship exists between you, the principal, and
your Agent, the company under which the individual salesperson who is representing
you, is licensed. The essence of the agency relationship is that the Agent has
the authority to represent the principal in dealings with others.
Agents and their salespeople are legally obligated
to protect and promote the interests of their principals as they would their own.
Specifically, the agent has the following
duties:
- Undivided loyalty as the agent must protect
the principal's negotiating position at all times, and disclose all known facts
which may affect or influence the principal's decision.
- To obey all lawful instructions of the principal.
- An obligation to keep the confidences of the principal.
- The exercise of reasonable care and skill in performing all assigned duties.
- The duty to account for all money and property placed in an Agent's hands while
acting for the principal.
- You can expect competent service from your agent, knowing that the company is
bound by ethics and the law to be honest and thorough in representing a property
listed for sale. Their own agents in a single transaction can represent both buyer
and seller.
DUAL AGENCY
Dual agency occurs when a real estate agent is
representing both buyer and seller in the same transaction. Since the agent has
promised a duty of confidentiality, loyalty and full disclosure to both parties
simultaneously, it is necessary to limit these duties in this situation, if both
parties consent.
If you find yourself in a dual agency relationship,
before making or receiving an offer, both you and the other party will be asked
to consent, in writing, to this new limited agency relationship.
The relationship involves the following
limitations:
- The agent will deal with the buyer and the
seller impartially;
- The agent will have a duty of disclosure to both the buyer and the seller except
that;
- the agent will not disclose that the buyer is willing to pay a price or agree
to terms other than those contained in the offer, or that the seller is willing
to accept a price or terms other than those contained in the listing;
- the agent will not disclose the motivation of the buyer to buy or the seller to
sell unless authorized by the buyer or the seller;
- the agent will not disclose personal information of either the buyer or seller
unless authorized in writing;
The agent will disclose to the buyer defects
about the physical condition of the property known to the agent.
WHERE THERE IS NO AGENCY RELATIONSHIP
You may also choose to use the services of a
realtor without having any kind of agency relationship. This might occur, for
example, when you are being shown a property by the seller's agent.
The realtor you choose to work with in this
manner has a legal and ethical duty to provide you with accurate, honest answers
to your questions and can provide all these services:
- Explain real estate terms and practices
- Provide and explain forms used
- Assist you in screening and viewing properties
- Inform you of lenders and their policies
- Identify and estimate costs involved in a transaction
- Assist you in establishing your range of affordability
- Prepare offers or counter-offers at your direction
- Present all offers promptly
A realtor who is not your agent cannot:
- Recommend or suggest a price
- Negotiate on your behalf
- Inform you of his/her principal's top/bottom line
- Disclose any confidential information about his/her principal unless otherwise
authorized
- You should not provide a realtor who is not your agent with any information that
you would not provide directly to his or her principal.
