Agency Disclosure

     Laws in regard to real estate transactions vary from state to state. While not the most exciting reading, this information is worth your consideration if you wish to be an informed consumer. No later than the first time you meet with a real estate agent or broker in person, Massachusetts state law says that the agent MUST explain the matter of "agency" and you should be presented with a form titled "Mandatory Licensee-Consumer Relationship Disclosure". This form is NOT A CONTRACT. The form's purpose is to help you understand the role of the real estate agent and their affiliated firm in your real estate transaction, whether selling, buying or leasing. It is also intended to help you understand the role of other agents who may be involved in your transaction. 

     If you are a buyer or seller, you can engage a real estate licensee to provide advice, assistance and representation to you as your agent. The real estate licensee can represent you as the seller (Seller's Agent) or represent you as the buyer (Buyer's Agent), or can assist you as a Facilitator.

     All real estate licensees, regardless of the working relationship with a consumer must, by law, present properties honestly and accurately, and disclosure known material defects in the real estate.

     The duties of a real estate licensee do not relieve consumers of the responsibility to protect their own interests. If you need advice for legal, tax, insurance, zoning, permitted use, or land survey matters, it is your responsibility to consult a professional in those areas. Real estate licensees do not and cannot perform home, lead paint, or insect inspections, nor do they perform septic system, wetlands or environmental evaluations.

     DO NOT ASSUME THAT A REAL ESTATE LICENSEE WORKS SOLELY FOR YOU UNLESS YOU HAVE AN AGREEMENT FOR THAT RELATIONSHIP. Below is a description of the various ways consumers can choose to work with an agent. 

     A seller can engage the services of a real estate licensee to act as the seller’s agent in the sale of the seller’s property. This means that the real estate agent represents the seller, who is a client. The agent owes the seller client undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accounting. The agent must put the seller's interests first and attempt to negotiate price and terms acceptable to their seller client. The seller may authorize sub-agents to represent him/her in marketing its property to buyers, however the seller should be aware that wrongful action by the real estate agent or sub-agents may subject the seller to legal liability for those wrongful actions.

     A buyer can engage the services of a real estate licensee to act as the buyer’s agent in the purchase of a property. This means that the real estate agent represents the buyer, who is a client. The agent owes the buyer client undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accounting. The agent must put the buyer's interests first and attempt to negotiate price and terms acceptable to their buyer client. The buyer may also authorize sub-agents to represent him/her in purchasing property, however the buyer should be aware that wrongful action by the real estate agent or sub-agents may subject the buyer to legal liability for those wrongful actions.

     When a real estate licensee works as a facilitator that licensee assists the seller and/or buyer in reaching an agreement but does not represent either the seller or buyer in the transaction. The facilitator and the broker with whom the facilitator is affiliated, owe the seller and buyer a duty to present all real property honestly and accurately by disclosing known material defects and owe a duty to account for funds. Unless otherwise agreed, the facilitator has no duty to keep information received from a seller or buyer confidential. Should the seller and/or buyer expressly agree, a facilitator relationship can be changed to a seller or buyer client relationship with the written agreement of the person so represented.

     In Massachusetts, real estate firms and businesses will operate as either a "Non-Designated Agency" or a "Designated Agency".  If you as a consumer chooses either to be represented as either a Buyer's Agent or a Seller's Agent, what also must be disclosed is the TYPE of FIRM with whom that agent is affiliated. If a Non-Designated Agency (Firm), all other affiliated agents are also working as an agent in your behalf. If a Designated Agency (Firm), only the licensee named on the form represents you. In this situation any other agents affiliated with the firm or business do not represent you and may represent another party in your real estate transaction. 

     A real estate licensee can be designated by another real estate licensee (the appointing or designating agent) to represent a buyer or seller, provided the buyer or seller expressly agrees to such designation. The real estate licensee once so designated is then the agent for that buyer or seller who becomes the agent’s client. The designated agent owes the buyer client or seller client, undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accounting. The agent must put their client's interests first, and attempt to negotiate price and terms acceptable to their client. No other licensees affiliated with the same firm represent the client unless otherwise agreed upon by the client. In situations where the appointing agent designates another agent to represent the seller and an agent to represent the buyer in the same transaction, then the appointing agent becomes a dual agent. Consequently, a dual agent cannot fully satisfy the duties of loyalty, full disclosure, obedience to lawful instructions, which is required of a seller or buyer agent. Only your designated agent represents your interests. Written consent for designated agency must be provided before a potential transaction is identified, but in any event, no later than prior to the execution of a written agreement for purchase or sale of residential property. The consent must contain the information provided for in the regulations of the Massachusetts Board of Registration of Real Estate Brokers and Salespeople (Board). 

     In Massachusetts, a real estate licensee may act as a dual agent representing both the seller and the buyer in a transaction BUT ONLY WITH THE EXPRESS AND INFORMED WRITTEN CONSENT OF BOTH THE SELLER AND THE BUYER. A dual agent shall be neutral with regard to any conflicting interest of the seller and buyer. Consequently, a dual agent cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions, which is required of a seller or buyer agent. A dual agent does, however, still owe a duty of confidentiality of material information and accounting for funds. Written consent for dual agency must be provided before a potential transaction is identified, but in any event, no later than prior to the execution of a written agreement for purchase or sale of residential property. The consent must contain the information provided for in the regulations of the Massachusetts Board of Registration of Real Estate Brokers and Salespeople (Board).  The forms that pertain to that form of representation are "Consent to Dual Agency" and "Notice of Dual Agency". 

MANDATORY REAL ESTATE LICENSEE-CONSUMER RELATIONSHIP DISCLOSURE

As the title implies, this form is required. Any agent must sign it and present it to you no later than 1st meeting in person. The consumer can choose to sign or decline to sign the notice with a check mark. The only exception is when attending an Open House. At Open House, you should see a placard or sign indicating who the hosting agent is representing.

THE FOLLOWING FORMS A CONSUMER WILL BE PROVIDED IF APPLICABLE:

     Consent for Dual Agency

     Consent for Designated Agency

     Notice of Dual Agency

     Notice of Designated Agency

Because they are for consumer protection, real estate firms and agents must keep these forms on file for 3 years from date of notice. If you'd like me to send you sample forms for your perusal, email me at shirley@athomecapecod.com.