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Important! At your first meeting, prior to viewing properties,
the broker who is working with you must provide you with, sign, and have you
sign the MANDATORY AGENCY DISCLOSURE FORM.
If that broker does not do that, he or she is in violation of the law.
WHAT IS AGENCY?
Agency
is the relationship formed between consumer and a broker/agent who is hired to
assist and represent him/her in a legal real estate transaction. The type of
relationship formed between the broker and the client is called a fiduciary
relationship.
The broker owes the following
fiduciary duties to the client:
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Loyalty
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Diligence
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Confidentiality
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Reasonable Care
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Disclosure
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Accounting
The client
may either be a
buyer or a seller. In real estate transactions, an agency relationship is formed between the
real estate broker and the client.
Agency duties
are enforced so that the client can rely on the broker putting the client's
interests before that of anyone else. The broker owes its allegiance to
the client.
TRADITIONAL (SELLER) AGENCY
All
agents represent the seller
unless otherwise agreed to. Under this
agreement, when a seller lists a property with a broker, that broker represents
the interests of the seller, creating an agency agreement.
The
agent
represents the seller only, even if he/she is
showing you the property directly. Price negotiations and information
about the seller are confidential between the
Seller and the Seller's Agent.
Where the broker you've been working
with
shows you another broker's listing, "your" broker is a
sub-agent (cooperating broker) of the seller's agent. The
same loyalty, trust, and obligations exist between the seller and
"your" agent.
BUYER AGENCY
Buyer
agency
is designed to
allow the Buyer an opportunity to have a broker represent him/her instead of
representing the seller.
When a buyer is
represented by the broker, all fiduciary responsibilities are owed by the
broker to the buyer. The Buyer now has the freedom to discuss with the broker
property value, negotiating strategies, and personal finances. The broker is
also free to discuss condition of the property, the structure of the offer,
seller's motivation, and other information he would not normally be able to
provide.
This type of agency
enables me to
truly work for you, and I am a big believer in it. Since all agencies cooperate
with us here in Boston, You will not be asked to provide compensation.
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Buyer Brokerage
Services |
Traditional (Seller)
Brokerage Services |
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1.
Buyer's Needs Paramount. The representing broker can devote full
attention and undivided loyalty to the buyer-client's needs (timing,
motivation, financing, etc.) without any obligation to a potential seller. |
1. Seller's needs paramount.
The
broker's legal obligation is of undivided loyalty to the seller, despite the
fact that he or she is working "with" buyer.. |
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2.
Buyer can talk freely. A brokerage company's duty of
confidentiality enables a buyer-client to to provide information without
fear of harming their negotiating position. |
2. Tell the seller all you learn. Broker
has an obligation of full-disclosure to the seller-client to tell all info
learned about the buyer that might enhance the seller's negotiating
position. |
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3.
First opportunity to view new listings. Because of the duty of
undivided loyalty to the buyer-client, they are notified of new listings and
given preference in scheduling opportunity to view these properties before
buyer-customers are notified. |
3. Lower level of responsibility to buyer-customers
results in notifying buyer-customers of new listings and giving scheduling
opportunity after buyer-clients |
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4.
Legal obligation of diligence enables and binds broker to devote
all the time and effort needed to serve buyer-client's needs. |
4. Relationship of buyer-customer and
broker less defined than that of buyer-client so efforts on behalf of
buyer-customers take back seat to buyer-client. |
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Viewing
Properties |
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1. OK to give facts accompanied by advice. |
1. Just the facts. Broker obligated to
provide material facts about property, but legally prohibited from
addressing any negative aspects of the property that are not material facts. |
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2. Educate the buyer. Buyer's
representative will assist buyer-client in making an objective comparison of
competing properties. |
2. Protect the seller.
Salesperson
legally prohibited from assisting buyer-customer in comparing competing
properties. |
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Negotiating |
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1. Able to educate and assist buyer-client,
if needed in negotiating strategy. Perform a market analysis on property.
Advocate for buyer. |
1. Material facts only. Legal obligation to
seller prohibits broker from assisting buyer customer with strategy. Can
provide buyer-customer with printouts, but no analysis. |
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2. Contract. Protect
buyer-client and work on his/her behalf. |
2. Contract. Attempt to protect seller. |
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3. Disclose information to buyer-client
regarding the property or seller which may strengthen negotiating position |
3. Disclose information to seller regarding
buyer which may strengthen negotiating position. |
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Follow through |
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1. Solve problems and manage details on
buyer-client's behalf |
1. Solve problems to seller's
satisfaction. |
DUAL AGENCY
This occurs when one brokerage has a
fiduciary relationship with two clients; One wanting to buy, the other to
sell.
When a dual agency is formed,
we will notify and receive consent from each client. Our
fiduciary relationship with our clients is based upon full disclosure and
informed consent.
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