The following is a brief outline of Thackeray LAW OF AGENCY as it applies to real estate transactions. This is neither a new style of operation nor is it unique to our company. It is the legal form of operations for all real estate agents. This is intended for your general information and should not be used as a substitute for competent legal advice.
Before you begin serious negotiations on a real estate trans action you should determine whether the agent is working with you or for you. Whether you are buying or selling a home, you will be treated by the real estate brokerage in one of two ways.
You will be considered a CLIENT or a CUSTOMER.
You, the Client, have a loyal agent working in your best interest and to whom, in most instances, you will pay a prearranged fee. Clients receive what is known as a fiduciary relationship. When you hire an agent to work for you, you become the agents client. He or she must always put your interests above his or her own. Agents must, by law, give loyalty, diligence, obedience and accountability to their clients. They may never use information or facts about their clients which could place them at a disadvantage in a transaction. The fiduciary relationship is one of the highest forms of of association recognized by law.
You, the Customer, or third party to the transaction will be treated fairly and honestly. You will receive certain valuable supportive services, but in most instances, will essentially represent yourself and be responsible for your own interest.
When an agent works with you as a customer or third party, you are due honesty, integrity and will be treated fairly. However, you will not receive fiduciary aspects of service given to the client. Simply put, no one can serve to masters.
Here are some of the ways these relationships can affect you in real estate transaction.
In the vast majority of real estate transactions, the agent has been hired by the seller and the seller is owed the fiduciary services mentioned. This means, for instance that it is the agents job to negotiate for terms and conditions that are in the best interest of his or her client/seller. An agent may not reveal “what the seller will really accept” in price or terms. Conversely he or she must, by law, tell his or her client how much the buyer will really pay (if it is known). On the otherhand, loyalty and obedience to the client does not include illegal acts, misrepresentations, or deceit by the agent on the client’s behalf.
If you are the customer or third party, you can expect many fine and supportive services from the agent. These include, but are not limited to:
• Multiple Listing Service property review
• Information and guidance on financing, local regulations
and general community data
Most importantly you may expect honesty and integrity
One of the agents duties is to deal with both sides fairly and in so far as he or she is able, to protect all from unfair practices. A professional agent will ask sellers about the possible defects or problems with the property when it is listed and will notify prospective purchasers of such known problems. This is done not only in the interest of honesty but it also protects the agent and client from potential legal action. It is against the law for sellers or their agents to purposefully hide defects in a property. This is not, however, an implication that the agent is guaranteeing the condition of any property. Customers must use every means to determine actual condition including the hiring of outside experts whenever appropriate. Finally, customers should be aware that, because of the agents fiduciary obligations, when you speak to the seller’s agent it is as if you are speaking to the seller. With honesty and integrity considered, you must as a customer use caution in revealing information which might put you at a disadvantage in negotiations because the agent is obligated by law to pass that information along to the seller.
You should also be aware that in some instances, it might be appropriate for you, as a buyer, to take client status by hiring an agent to work for you. This decision should be made with the agent as early as is feasible in the relationship.
In all events, always ask your agent for whom he or she works and have him or her explain to you both the advantages and disadvantages of the customer or client relationship.
We at Prudential Manor Homes, REALTORS want you to know that, whether you have a customer or a client status, you can be assured we will make every effort within the guidelines established above to bring your real estate transaction to a satisfactory conclusion. We have prepared this brief outline on real estate facts of life so that, whatever your status, you will have the advantage of protecting your best interests by being properly informed of the legally established roles of all parties.
