 |
|
|
|
In years past, real estate brokers would list a home and in a sense, every real estate agent that showed the home actually represented the seller of the home. That was true, even though most prospective homebuyers had the misconception that their real estate agent had been representing and working for them in the transaction. After all, their agent had been driving them around in his/her car, taking them to lunch, and somewhat became their new best friend. The effect however was that the homebuyer was without representation in an important and large financial purchase.
In recent years, the real estate industry, much in response to this obvious confusion and misconception, developed procedures whereby the real estate agent working with the prospective homebuyer could, in fact, represent the homebuyer as opposed to the seller.
Today, as opposed to years past, the homebuyer may have the fiduciary representation necessary and vital in the purchase of a home. Today, even the most common and average purchase of a home is indeed a complex real estate transaction. And for most families, the purchase of a home represents one of their largest financial investments and important decisions of their lifetimes.
AGENCY CUSTOMER OR CLIENT?
The decision to purchase or sell a home can be one of the most important events in your life. When starting this process, it is necessary for you to understand the laws of agency in Massachusetts and how these laws will affect you, regardless of your prior experiences. I want you to understand and be comfortable with this process. My commitment is to provide you with the best possible service and to assist you and your family in a smooth transition.
Massachusetts law requires all real estate agents to disclose their agency relationship to prospective buyers at the beginning of the first personal meeting when the buyer's specific needs are being discussed. At that time, the buyer must sign a form defining the agency relationship into which he/she will enter with the agent and company.
A GENERAL UNDERSTANDING ABOUT AGENCY
The type of relationship formed between an agent and a client is called a fiduciary relationship. A fiduciary relationship is one based on trust because the agent owes the following duties to the client:
▪ Accountability
▪ Confidentiality
▪ Diligence
▪ Full Disclosure
▪ Honesty
▪ Reasonable Skill & Care
▪ Undivided Loyalty
The courts have defined an agent's responsibilities as putting the client's interest before that of anyone else. Courts also require the real estate agent to be fair and honest in all aspects of the transaction. In short, the agent owes allegiance to the buyer or seller who has client status but must always be fair and honest to the other party.
TYPES OF AGENCY REPRESENTATION
SELLER’S AGENT
A seller can engage the services of a real estate agent to sell his property (called the listing agent) and the real estate agent is then the agent for the seller who becomes the agent’s client. This means that the real estate agent represents the seller. The agent owes the seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability., provided, however, that the agent must disclose known material defects in the real estate. The agent must put the seller’s interests first and negotiate for the best price and terms for their client, the seller. (The seller may authorize sub-agents to represent him/her in marketing its property to buyers, however the seller should be aware that wrongful action by the real estate agent or sub-agents may subject the seller to legal liability for those wrongful actions.)
BUYERS AGENT
A buyer can engage the services of a real estate agent to purchase property and the real estate agent is then the agent for the buyer who becomes the agent’s client. This means that the real estate agent represents the buyer. The agent owes the buyer. The agent owes the seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability., provided, however, that the agent must disclose known material defects in the real estate. The agent must put the buyer’s interests first and negotiate for the best price and terms for their client, the buyer. (The buyer may authorize sub-agents to represent him/her in purchasing property , however the buyer should be aware that wrongful action by the real estate agent or sub-agents may subject the buyer to legal liability for those wrongful actions.)
(NON-AGENT) FACILITATOR
When a real estate agent works as a facilitator that agent assist the seller and buyer in reaching an agreement but does not represent either the seller or buyer in the transaction. The facilitator and the broker with whom the facilitator is affiliated owe the seller and buyer a duty to present each property honestly and accurately by disclosing known material defects about the property and owe a duty to account for funds. Unless otherwise agreed, the facilitator has no duty to keep information received from a seller or buyer confidential. The role of the facilitator applies only to the seller and buyer in the particular property transaction involving the seller and buyer. Should the seller and buyer expressly agree a facilitators relationship be changed to become an exclusive agency relationship with either the seller or buyer.
DESIGNATED SELLER’S AND BUYER’S AGENT
A real estate agent can be designated by another real estate agent (the appointing or designating agent) to represent either the buyer or seller, provide the buyer or seller expressly agrees to such designation. the real estate agent once so designated is them the agent for either the buyer or seller who becomes their client. The designated agent owes the buyer or seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability., provided, however, that the agent must disclose known material defects in the real estate. The agent must put their client’s interests first and negotiate for the best price and terms for their client. In situations where the appointing agent designates another agent to represent the seller and an agent to represent the buyer then the appointing agent becomes a dual agent. Consequently a dual agent cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions which is required of an exclusive seller or buyer agent., The written consent for designated agency must contain the information provided for in the regulations of the Massachusetts Board of Registration of Real Estate Brokers and Salespeople (board).
DUAL AGENT
A real estate agent may act as a dual agent representing both the seller and buyer in a transaction but only with the express and informed consent of both the seller and buyer. Written consent to dual agency must be obtained by the real estate agent prior to the execution of an offer to purchase a specific property. A dual agent shall be neutral with regard to any conflicting interest of the seller and buyer. Consequently a dual agent cannot satisfy fully the duties of loyalty, full disclose, obedience to lawful instructions which is required of an exclusive seller or buyer agent. A dual agent does, however, still owe a duty of confidentiality of material information and accounting for funds. The written consent for dual agency must contain the information provided for in the regulations of the Massachusetts Board of Registration of Real Estate Brokers and Salespeople.
SUMMARY
Once you understand agency relationships and the services that can be provided, you will be asked to sign an agency disclosure form in accordance with Massachusetts law. As a buyer or seller be assured that you are working with a real estate company that cares about your receiving a high level of service and satisfaction. I am committed to having your transaction be pleasant, successful and handled in a professional manner. I will work very hard throughout the process to earn your loyalty and respect.
|
|
|
