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Agency
Relationships...
Whether
you're looking for a new home or are getting ready to sell your present
home, today's fast changing real estate market offers many choices for
working with a real estate agent and his/her company to achieve your
goals.
Generally,
an "agent" is someone who represents the interest of one
person in dealing with others. An agency relationship in real estate is
an arrangement between you, your real estate company and your agent to
assist you in buying or selling a home. In the past, real estate agents
were required to strictly represent the seller. With the ever increasing
complexity of the real estate market today, many buyers and sellers are
opting for specialized services without compromising their personal
goals.
Before
you enter into a discussion with a real
estate agent regarding a real estate transaction, you should understand
what type of agency relationship you wish to have with the agent.
...Agency
disclosure means that a real estate licensee, when acting as
an agent for one party to a transaction,, must let the other party know
who the agent represents in that transaction. For example, a sub-agent
selling sales person (such as is found in our ordinary co-brokerage
situation) would be required to let the buyer know that the salesperson
represents the seller.
New
York State law requires real estate licensees, who
are acting as agents of sellers or buyers of property to advise the
potential sellers, or buyers with whom they work, of the nature of their
agency relationship, and the rights and obligations it creates.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Seller's
Agency (Selling a Home)
When you list your home for sale, you
employ the real estate company through your agent as a seller's
representative. An agent can provide valuable services to a buyer, but
all agents and subagents involved in the transaction work on behalf of,
and in the best interest of, the seller. A subagent may work in a
different real estate office. This is the most traditional arrangement
in real estate brokerage.
A seller’s agent, has without
limitation, following fiduciary duties to the seller: reasonable care,
undivided loyalty, confidentiality, full disclosure, obedience and a
duty to account.
The
obligations of a seller’s agent are also subject to any specific
provisions set forth in an agreement between the agent and the seller.
In
dealings with the buyer, a seller’s agent should (a) exercise
reasonable skill and care in performance of the agents duties; (b)
deal honestly, fairly and in good faith; and (c) disclose all
facts known to the agent materially affecting the value or desirability
of property, except as otherwise provided by law.
The
buyer should understand that the selling agent is likely representing
the seller unless the buyer has executed a buyer agency contract. The
buyer should not make confidential disclosures and should not rely on
the selling agent in a way that would strain the sub-agency relationship
that may exist. The agent with whom you are working is obligated to
discuss this with you at your first meaningful meeting. The agent is
required to disclose which party they represent.
The
specific language that must be used to explain the agency relationship
should be given to you in writing. You will be asked to sign
acknowledgment of receipt.
Information
from the customer may be treated as confidential by the seller's agent
when so noted on the disclosure form. Confidential information may
include divorce, bankruptcy, foreclosure, motivation to buy/sell,
employment situation, etc. Be aware that, if a situation comes to a
licensee's attention where the seller or buyer cannot perform the offer
to purchase, this becomes an adverse material fact which must be
disclosed to the other party. The duty to disclose adverse material
facts overrides the duty of confidentiality.
Can
the buyer get good service from a seller's agent, knowing they work in
the seller's best interest?
Sheryl
treats every buyer with respect. New York regulations require fair
treatment and full disclosure to all parties, subject to statements of
confidentiality as provided within the agency disclosure. It is
important that you choose one professional to help you find what you are
looking for. By sharing your motives and your criteria, your agent of
choice can guide you through the offer process, and then guide you
through the inspection, the loan process and the closing. Choose an
experienced professional. Put their expertise to work for you. A good
REALTOR® can help smooth the bumps you may encounter on the road to
closing.
Agency
Relationships:
Fact:
·
57%
of buyers believe their agent represented them in their transaction.
·
74%
of sellers believed the agent who worked with the buyers represented the
buyers (instead of the seller) (Source: 1983 Federal Trade Commission
survey.)
Your
Agent's Fiduciary Duties
When acting on your behalf, your agent is bound by law to the following:
·
Must
be loyal at all times and act in your best interests
·
Obey
and fulfill all your lawful instructions
·
Is
obligated to safeguard your confidences (i.e. urgency to buy or sell)
·
Needs
to exercise reasonable care and diligence in answering any questions
about your purchase or sale
·
Accountable
for handling all paperwork and funds promptly and presenting offers in a
timely manner
·
Other
duties as specifically outlined in the listing contract or buyer's
agency contract
·
Condition
of fees
Seller's
Agency (Buying a Home)
Can the buyer get good service from a
seller's agent, knowing they work in the seller's best interest?
Have
you ever bought a car, a TV set, a major appliance, a business suit or a
pair of shoes? The sales people who assisted you were agents of the
seller and working in the seller's best interest. You knew that. You,
however, put confidence in the salesperson's knowledge of the product.
You looked to that agent for expert advice as you shopped and moved
toward a buying decision. When shopping for real estate, the seller has contracted with
an agent (possibly, along with other sub-agents) for a service. The
seller expects the agent to market their home properly and to provide
all information necessary to assist the buyer in reaching a buying
decision. That includes, not only information, on the property. The
selling agent, to be effective, must also be able to provide enough
financing information, inspection information and comparable sale
information to be able to guide the buyer and the seller to a mutually
acceptable closing.
Unlike
the attorney-client relationship, which is, by design, adversarial; the
agent-customer and the agent-client relationship both require that the
REALTOR® performing the service be honest and fair dealing with all
parties. An agent, whether for a buyer or a seller, is expected, by law,
to disclose all information that is significant to a transaction. The
days of "caveat-emptor" are long gone. "Buyer
Beware" is an archaic term. An unhappy buyer leads to an unhappy
seller. Whether the agent is a buyer's agent or a seller's agent,
fairness to all is a requirement.
Buyer's
Agency (Buying a home)
Buyer Agency relationships exists when the agent represents the buyer
exclusively in the real estate transaction. The agent works on behalf
of, and in the best interest of, the buyer. This concept may seem new,
yet it has been in existence for many years.
Buyer Contract Requirements:
·
Duties
to both parties
·
Duration
of contract
·
Fees
(what condition fees will be earned, who pays and when)
·
Other
duties as specifically outlined in the listing contract or buyer's
agency contract.
Dual
Agency
An agency relationship in which the broker represents both the buyer and
the seller. This includes an in-house sale, when both the buyer and the
seller have contracted with the same company, even if they are using two
different salespeople. Both parties must agree prior to any negotiation
or acceptance of a purchase agreement and are required to meet
disclosure laws in most states. The agent or agents must be impartial to
both parties and cannot disclose any confidential information to either
the seller or the buyer. The specific duties owed to the buyer and the
seller, depend upon the contract that is arranged, however, some
contract requirements may be:
·
Disclosure
of any material defects in the property
·
Fair
treatment of each party
·
Disclosure
of the qualifications of the buyer to buy and the seller to sell
·
Assistance
in property inspections
·
Diligence
in facilitating the sale of property after the purchase agreement or
sales contract has been accepted.
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