As a buyer and seller it is important to understand the many types of agency a Realtor must follow. It is also important to understand the difference between customer and client.
Customer- Buyers and Sellers who choose not to enter an agency relationship.
Basic customer duties an agent must follow:
- Present all offers in a timely manner,
- Account for money or other property received in your behalf.
- Provide an explanation of the scope of services to be provided
- Be fair and honest and provide accurate information
- Disclose “adverse material facts” about the property or the transaction which are within the licensee’s knowledge.
Unless or until you enter into a written agreement with the company for agency representation you are considered a “Customer” of the company, and the Company will not act as your agent. As a customer, you should not expect the Company or its licensees (Agents) to promote your best interest, or keep your bargaining information confidential.
Customer service does not require a written agreement; therefore, you are not committed to the Company in any way.
You Can Become a Client
Clients receive more services than customers. If client status is offered by the real estate Company, you can become a client by entering into a written agency agreement requiring the Company and its associated licensees to act as an agent on your behalf and promote your best interests. If you choose to become a client, you will be asked to confirm in your written representation agreement that you received this brochure in a timely manner.
A seller becomes a client of a real estate company by signing a formal listing agreement with the Company. For a seller to become a client, this agreement must be in writing and must clearly establish the terms of the agreement and the obligations of both the seller and the Company which becomes the agent for the seller.
A buyer becomes a client or a real estate Company by signing a formal buyer agency agreement with the Company. For a buyer to become a client, this agreement must be in writing and must clearly establish the terms of the agreement and the obligations of both the buyer and the Company which becomes the agent for the buyer.
If you enter into a written agency agreement, as a Client, you can expect the real estate company to provide the following client-level services:
- Obedience
- Loyalty
- Disclosure
- Confidentiality
- Accounting
- Reasonable care and skill
Client-level services also include advice, counsel and Assistance in negotiations.
Types of Agency
Single Agency- when the Company represents only one client in the same transaction (the seller or the buyer), it is called single agency.
Dual Agency- Dual Agency exists when the real estate Company has two clients in one transaction- a seller client and a buyer client.
At the time you sign an agency agreement, you may be asked to acknowledge whether you would consider giving written consent allowing the Company to represent both you and the other client in a disclosed dual agency relationship.
Disclosed Dual Agency- In a disclosed dual agency, the Company’s representation duties are limited because a buyer and seller have recognized conflicts or interests. Both clients’ interests are represented by the Company. As a disclosed dual agent, the Company and its associated licensees cannot advocate on behalf of one client over the other, and cannot disclose confidential client information concerning the price negotiations, terms, or factors motivating the buyer/client to buy or the seller/client to sell. Each Dual Agency Agreement contains the names of both the seller client(s) and the buyer client(s) and identifies the property.
Designated Agency- In designated agency, a broker-in-charge may designate individual associated licensees to act solely on behalf of each client. Designated agents are not limited by the Company’s agency relationship with the other client, but instead have a duty to promote the best interest of their clients, including negotiating a price. The broker-in-charge remains a disclosed dual Agent for both clients, and ensures the assigned agents fulfill their duties to their respective clients.
At the time you sign an agency agreement, you may be asked to acknowledge whether you would consider giving written consent allowing the Company to designate a representative for you and one for the other client in a designated agency.
Each Designated Agency Agreement contains the names of both the seller client(s) and the buyer client(s) and identifies the property.
What To Look For In Any Agreement
When you choose client-level service, your written Agency Agreement or your agent should answer these questions.
- Can I work with other Companies during the time of the agreement?
- What will happen if I buy or sell on my own without the agent?
- When will this agreement expire?
- How will the company be paid for its services?
- Does this Company represent both buyers and sellers as clients?
- If so, what are the choices if two clients become involved in one transaction?
- What duties will the Company continue to provide me after the transaction is completed?
If you plan to become a client of a Company, the licensee will explain the agreement to you fully and will answer questions you may have about the agreement. Remember, however, that until you enter into a representation agreement with the Company, you are considered a customer and the Company cannot be your advocate, cannot advise you on price or terms, and cannot keep your confidences.
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