But today I wanted to touch on the Real Estate Brokerage Disclosure form that everyone signs when working with a Realtor. Many times these forms are skimmed over and not thoroughly explained. I've had several of my clients explain that they really didn't understand what they had signed. This form lets you know in what capacity your Realtor is working for you.
Before you work with a Realtor, you should sign this form saying that you understand what it means. If you do not sign a written agreement then you are considered to be a Customer. I will talk about that later. The form basically details what your relationship is while working with that agent. For example if you are wanting to list your property with an agent, then your agent would be serving as your Seller's Agent. A seller's agent will represent you the seller and owes you the duty of utmost good faith, loyalty and fidelity in addition to the following:
- performing the the terms of any written agreement with any parties of the transaction
- exercise reasonable skill and care
- advise the parties to obtain expert advice as to material matters that the specific are beyond the agents expertise.
- present all offers and counteroffers in a timely manner
- promptly account for all money and property that the Broker has received.
- keep you fully informed regarding the transaction
- If your agent is going to represent both the Buyer and Seller then they must obtain written consent of the parties before assisting the Buyer and Seller in the same real estate transaction as an Intermediary.
- assist in complying with the terms and conditions of any contract and with the closing of the transaction
- disclose to the parties any interests the Intermediary may have which are adverse to the interest of either party
- disclose to prospective Buyers and known adverse material facts about the property
- disclose to prospective Sellers, any adverse material facts, including adverse material facts pertaining to the Buyer's financial ability to perform the terms of the transaction
- disclose to the everyone than an Intermediary owes no fiduciary duty either to the Buyer or Seller and is not allowed to negotiate on behalf of the Buyer or Seller and may be prohibited from disclosing information about the other party, which if known, could materially affect negotiations in the real estate transaction
- disclose Buyer's intent to occupy property as primary residency
Now if you do not want to "hire" your agent to be either your Buyer's Agent or Seller's Agent, or as an Intermediary, then you remain a customer. You are a party to the transaction but your agent owes NO duty of confidentiality to you the customer. Any information shared with your agent may be shared with the other party to the transaction as your own risk. As a customer you should not tell your agent any information that you do not want shared with the other parties of the transaction. The Broker/agent must treat you honestly and with fairness disclosing all material matters actually known by the agent. The agent also owed the customer the same obligations enumerated in the bullet points above.
And finally, there is the Intermediary. An Intermediary does NOT owe the parties any duties as an agent including fiduciary duties of loyalty and fidelity but they will have the obligations of the bullet points made above.
If you decide to purchase a property that is also listed with the agent, then an Intermediary disclosure is signed.
Now that you understand all of that, there is another category called the Designated Agent. This occurs when you have the buyer and the seller working in the same office and the Broker "designates" and agent to work as a Buyer's Agent or Seller's agent and the Broker (or someone they appoint) becomes the "Transaction Manager". This person will supervise the transaction and will NOT disclose to either party any confidential information about the Buyer or Seller.
I realize this is a lot of information to stomach, but in reality if you are entering into a real estate transaction, you do need to know the responsibilities of the parties involved. Who is looking out for you? Who is looking out for the other party? Make sure and ask your agent about this disclosure and make sure you understand what you are signing.
In the brighter spot of the day, in the last week we have had 41 NEW listings, 38 changes in price and 27 residential properties sold. I'd say that it was a good 6 days. Word on the streets are that the Treasury Dept is considering raising rates to stimulate the economy. Rates lately have been in the lower 4%. Why wait for them to go back up to 5% or even 6%. If you know of someone that has indicated they might be wanting to sell their home or perhaps buy a home, please pass this information on. I love hearing comments from folks that read my blog. Also visit our website to find out how much you might be able to qualify for...Hill Realty Prequalification.
Sample Real Estate Brokerage Disclosure Form