Q. What is Agency? I keep signing forms about it and all my Realtor says is that the form is required. J.H. Rio Vista
A.Your Realtor is correct, the form is required, but why? Purchasing a home represents itself as likely the largest purchase you will ever make, so there are some rules in place for your protection.
It is of the highest importance that you understand who represents you and their legal and ethical interaction capabilities. Your Realtor can access homes for sale, write up listings or offers, schedule inspections, negotiate on your behalf, and may process all the connected paperwork pertinent to your transaction. Your Realtor cannot accept tips, fees, or commissions from you or anyone. All information you convey to your Realtor is confidential and is held as such even after a transaction closes. All Realtor/Agents work for a person who holds a Broker’s license. The Broker is responsible for the Realtor/Agent in all they do, so the Broker has to exercise due diligence in supervising their Realtors through their business plan, ethics compliance, board memberships, goals, and their approach and conveyance of information.
The form you refer to has language that refers to Brokers and how they can operate in a sales capacity; as a Sellers Agent, Buyers Agent, or Dual Agency (both buyer and seller). Since a Realtor/Agent works for a Broker, if a buyer and a seller are both represented by different Realtor/Agents, but both Agents work for the same Broker, that Broker is then responsible for both Agents and the entire scope of the transaction. A Broker owes any client/principal a general duty, but the fiduciary duty required by legal and ethical standards is inherent to any Broker office transaction.
During sales transactions, I have run into Realtors that do not fully understand Agency and their limitations related to it, which is alarming. A Broker that cannot produce form AD (Agency Disclosure) from a completed sales file could stand to lose their commission for that sale.
My My, all the things that can go wrong and a Broker can be sued for is the reason I have Errors and Omissions insurance.
Q. My Realtor admonished me for going by the house I’m buying. I went without her and talked with the owner. Is that really a big deal? R.W. Rio Vista
A.That could be a deal breaker; it depends on what you and the seller spoke about and if you made any verbal contracts. Agency, as described above, sets your Realtor as the sole person to negotiate with the seller’s Realtor.
Nothing horrifies me more than a seller and a buyer “chatting” about the house; things are said and clarity is not written down and responsibilities are not clear.
While showing a home the seller told the buyer he could have a particular lawn statue the buyer expressed interest in if he offered full price. I was unaware of that conversation, and when the buyer wrote an offer and the seller accepted, the statue was not mentioned and on move out the statue went with the seller. The buyer brings this to my attention, and further he wants compensation for the statue!
The buyer then refused to sign final documents and the sale went on hold. I ended up providing a replacement statue since both buyer and seller would not budge.
Lesson learned, now I ask if any side commitments have been discussed so I may address them properly and made part of the sale.
Going outside the Agency guidelines and circumventing your Realtor is sure to bring your deal to its knees.
I had a buyer inquire about the seller’s furnishings and wanted to buy several pieces, and was willing to pay a good price. I told my buyer to let me see what I could do, so I managed to negotiate those pieces to be included with the sale, saving my buyer the additional cost!
Confide in your Realtor, they’re trained and licensed to help you!
Posted on March 13, 2019 at 10:50 am by Sam Richards