|
|
Real Estate Agency or Who Represents Whom and Why???? Understanding: Agency: An agency relationship is formed when one person represents the interests of another person. Connecticut real estate agents are licensed to represent a person for the sale, lease, or purchase of a property. The person represented is the client. Agent responsibility to the client is defined by state law, the REALTOR® Code of Ethics and general principles of agency law. The relationship created between the agent and the client is a fiduciary relationship. A fiduciary relationship is based on trust. The agent owes the following duties to the client: Confidentiality - Loyalty –Disclosure - Diligence – Obedience - Accounting - Reasonable Care Courts enforce agency duties!!!! This ensures that the client can rely on the agent putting the client's interests before those of anyone else. Courts also require that the real estate agent be fair and honest with all parties involved in the transaction. On June 1, 1997, the Connecticut Real Estate practices on agency changed. Previously, by law, Real Estate Agents always represented the interests of the Seller - even if they were working with the Buyer and had never met the Seller. Legally, that meant that the Agent who had a relationship with the Buyer could not disclose any information that might have harmed the Seller's interests and, at the same time, that the Seller was being represented by Sub-Agents that he or she had never met. Under the new law, agency is defined by contractual obligations. Seller Agency: Traditionally, real estate agents have represented only the Seller. Agency duties are owed to the Seller, even if the agent is working with the Buyer. In this case, the Seller is the client.A Buyer can purchase a property that the Sunset Creek Realty LLC has listed and choose not to be represented. In such a case you would be a customer of the Sunset Creek Realty LLC. While fiduciary obligations would be owed to our client (Seller), Sunset Creek Realty LLC is still obligated by law to be fair and honest with all parties. Agency duties are due only to the Sellers. The Buyer should be aware that the agent represents the Seller. The Buyer should not rely on the agent for information regarding Seller motivation, or for assistance in determining an offering price that is other than the asking price. However, the agent must be fair, open and honest with the Buyer with regard to all known material facts. Disclosure of such facts is required by state law, the REALTOR® Code of Ethics, and company policy. Buyer Agency: Buyer Agency is a relatively new type of agency. Buyers have become aware that they can benefit by having an agent represent their interests. In some areas of the country, Buyer Agency has become as prevalent as the traditional Seller and Sub-agency type of business. In this case the Buyer is the client. All fiduciary duties are owed to the Buyer and not the Seller in a Buyer agency relationship. The Buyer may discuss the value of properties, negotiating strategies and personal finances with the agent. The Buyer can obtain the agent's opinion concerning the Seller's motivation for selling, the condition of the property, the effect of improvements, and other information which a Seller's agent cannot provide. A Buyer's agent makes every reasonable effort to locate and help negotiate for the property described by the Buyer. Although the traditional agent works hard to find the perfect property for a Buyer, the traditional agent has some limitations because of the duties owed to the Seller Dual Agency: Sunset Creek Realty LLC lists properties for sale, thereby forming an agency relationship with our Sellers. We also enter into agency relationships with Buyers who choose to be clients. A dual agency situation arises when one of our Buyer-clients wants to buy an Sunset Creek Realty LLC listing. The agents must treat the interests of the Buyer and Seller equally to maintain loyalty to the transaction. The agents must NOT disclose any information that would create a negotiating advantage for either client in a dual agency situation such as: Confidential information about the Seller and/or Buyer: motivation to sell/buy price/terms negotiating strategy The price the Seller will accept other than the listing price The price the Buyer is willing to pay Recommend or suggest a price the Seller should accept or counter Dual agency sometimes happens, and when it does, the agency relationship is shared. But everyone's goal remains the same--to buy or sell a property. Designated Agency: When Sunset Creek Realty LLC represents both the Buyer and the Seller and one or more parties do not wish to have a dual agent, all parties may consent to designated agency. In that case designated individual agents are chosen to represent only one party each in the transaction. |