Agency Law & Real Estate

THE AGENCY RELATIONSHIP

REALTORS work within a legal relationship called agency. The agency relationship exists between you, the Principal and your Agent, the Brokerage under which the individual salesperson or Broker who is representing you is licensed. The essence of the agency relationship is that the Brokerage has the authority to represent the Principal in the dealings with others.

Brokers and their salespeople are legally obligated to protect and promote the interest of their Principals as they would their own. Specifically, The REALTOR has the following duties:

1 )  To protect the Principal’s negotiating position at all times, and disclose all known     
       facts which may affect or influence the Principal’s decision (undivided loyalty).
2 )  To obey all lawful instructions of the Principal.
3 )  To keep the confidences of the Principal.
4 )  To exercise reasonable care and skill in performing all assigned duties.
5 )  To account for all money and property placed in a Licensees possession while acting  
       for the Principal.

You can expect competent service from your REALTOR, knowing that he/she is bound by ethics and the law to be honest and thorough in representing a property listed for sale. Both Buyer and Seller can be represented by their own Agents in a single transaction.

LIMITED DUAL AGENCY

Dual agency occurs when a real estate Brokerage is representing both the Buyer and the Seller in the same transaction. Since the brokerage has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary, if both parties consent, to limit these duties in this situation.

If you find yourself involved in a dual agency relationship, both you and the party will be asked to consent in writing to this new limited agency relationship before making or receiving an offer.

This relationship involves the following limitations:

The Brokerage will deal with the Buyer and the Seller impartially;
The Brokerage will have a duty of disclosure to both the Buyer and the Seller except that:
the Brokerage 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 then those contained in the Listing;
The Brokerage will not disclose the motivation of the Buyer to buy or the Seller to sell unless authorized by the Buyer or the Seller;
The Brokerage will not disclose personal information about either the Buyer or the Seller unless authorized in writing to do so;

The Brokerage will disclose to the Buyer defects about the physical condition of the property known to the Brokerage.
The Brokerage may disclose all comparable property information to the Seller and Buyer at the same time.
The Brokerage will not be required to disclose to the Buyer Seller confidential information obtained through any other existing or former agency relationship.

WHEN 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 and honest answers to your questions and can provide you with all of 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 representing you cannot:

Recommend or suggest  price other than that given by the Seller
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 to do so.

You should not provide a REALTOR who is not your Agent with any information that you would not provide to his or her Principal.