Working With A Realtor

Monday Apr 24th, 2017

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Whether you are a Seller or a Buyer, understanding who a Realtor works for in your Real Estate Transaction can shape the success ofyou transaction.  There are FOUR common types of Agency Representaion in Real Estate.  Some are obvious while other will need to be clearly explained to you by the Brokerage before proceeding.

Typically people assume a Salesperson duties are to parties paying for service or product. In most cases this is true, unless however there is a contract between any of the parties.  A Brokerage Representing a Buyer must do what is best for the Buyer. In this case a Seller will understand that confidential information about the buyer cannot be disclosed, however the seller can expect to be treated fairly and honestly.  Realtors are governed by a legal concept of "AGENCY". It is important that the people Realtors work for understand when an agency relationship exists and when it does not...and more importantly they should understand what it means.

 

1. SELLER REPRESENTATION

Signing a Listing Agreement creates the contract between the Seller and Real Estate Brokerage. This forms a Seller Representation or Agenncy Relationship. The Listing Agreement also specifies the Services the brokerage will rpovide, it establishes a fee arrangement for Brokerages Services and explains any obligations a seller may have. Realtors are governed by a legal concept of "AGENCY". It is important that the people Realtors work for understand when an agency relationship exists and when it does not...and more importantly they should understand what it means.  A Brokerage Representing a Seller must do what is best for the seller. Fiduciary Duties include: Disclosure, Confidentiality, Accountability, Obedience, Competency and Loyalty.  Granted that confidential information about the seller cannot be discussed with a prospective Buyer, A Buyer working with a Seller's representative can expect fair and honest service and disclosure of pertinent information about the property being sold.

 

2. BUYER REPRESENTATION

Signing a Buyer Agreement creates the contract between the Buyer and the Real Estate Brokerage. This forms a Buyer Representation or Agency Relationship. The Buyer Represenation Agreement also specifies the Service the Brokerage will provide, it establishes a fee arrangement for the Brokerage's Services and explains any obligation a Buyer may have. Buyers will be obligated to work exclusively with that brokergae for a period of time.  A Brokerage representing a Buyer must do what is best for thr Buyer. Fiduciary Duties include: Disclosure, Confidentiality, Accountability, Obediaece, Competency and Loyalty. A Brokerage Representing a Buyer must do what is best for the Buyer. In this case a Seller will understand that confidential information about the buyer cannot be disclosed, however the seller can expect to be treated fairly and honestly.

 

3. MULTIPLE REPRESENATION/ DUAL AGENCY

Unlike a lawyer a Realtor can legally represent two clients in the same transaction. Form time to time a Real Estate Brokerage will represen both the Seller and the Buyer as clients through their respective Agreement. In the case of a Multiple Representation, both the Seller and Buyer must acknowledge and consent to this arrangement prior to any offers being presented. Now the Brokerage will be obliged to do what is best for both the Seller and buyer. This is typically achnowledge through a form called "Confirmation of Cooperation and Representation" and because the Brokerage's Loyalty is divided between the Seller and the Buyer this form will also explain the rights and duties of everyone involved and any limitations to those rights and duties.

 

4. CUSTOMER SERVICE

A Customer Service Agreement will need to be signed by either the Seller or the Buyer when they choose not to create a Seller or Buyer Client Relationship. A Realtor can provide many valuable services in a fair and honest manner under this type of agreement. 

 

 Real Estate negotiations can often be complex and a Brokerage can provide client representation and/or customer service to more than one Seller or Buyer in the same transaction. The Brokerage must disclose these relationships to each Seller and/or Buyer prior to entering into any negotiations.