…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.
The buyer should understand that the selling agent is likely representing the seller unless the buyer has executed a buyer agency contract. 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.
Both buyers and sellers should be aware that Texas Law requires fair treatment and full disclosure to all parties in a transaction.
<Picture>Agency RelationshipWhether 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. 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.
•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.)
<Picture>Your Agent’s Fiduciary Duties <Picture>
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
<Picture>Seller’s Agency (Selling a Home) <Picture>
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. This is the most traditional arrangement in real estate brokerage.
Seller Contract Requirements:
•Work to be performed •Duration of contract •Condition of fees
<Picture>Seller’s Agency (Buying a Home) <Picture>
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 (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.
<Picture>Buyer’s Agency (Buying a home) <Picture>
This agency relationship 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.
<Picture>Dual Agency <Picture>
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.
Sherman & Co.
819 Water, Suite 170
Kerrville, TX 78028