WORKING WITH A REAL ESTATE AGENT
*THE AGENCY RELATIONSHIP*
REALTORS work within a legal relationship called agency. The agency relationship exists between you, the principal, and your agent, the company under which the individual salesperson who is representing you, is licensed. The essence of the agency relationship is that the agent has the authority to represent the principal in dealings with others.
Agents and their salespeople are legally obligated to protect and promote the interests of their principals as they would their own.
1)UNDIVIDED LOYALTY - The agent must protect the principal's negotiating position at all times, and disclose all known facts which may affect or influence the principal's decision.
2)TO OBEY ALL LAWFUL INSTRUCTIONS OF THE PRINCIPAL.
3)An obligation to KEEP THE CONFIDENCES OF THE PRINCIPAL.
4)THE EXERCISE OF REASONABLE CARE AND SKILL in performing all assigned duties.
5)The duty to ACCOUNT FOR ALL MONEY AND PROPERTY placed in the agent's hands while acting for the principal.
You can expect competent service from your agent,
knowing that the company is bound by ethics and the law to be
honest and thorough in representing a property listed for
sale. Both the buyer and the seller can be represented by
their own agents in a single transaction.
Dual agency occurs when a real estate agent is representing both buyer and seller in the same transaction. Since the agent has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to limit these duties in this situation, if both parties consent.
If you find yourself involved in a dual agency relationship, before making or receiving an offer both you and the other party will be asked to consent in writing to this new limited agency relationship.
This relationship involves the following limitations:
a)The agent will deal with the Buyer AND the Seller IMPARTIALLY;
b)THE AGENT WILL HAVE A DUTY OF DISCLOSURE TO
BOTH THE BUYER AND THE SELLER EXCEPT THAT;
1)the Agent will not disclose that the Buyer is willing to pay a price or agree to terms other than those contained in the Offer, or that the Seller is willing to accept a price or terms other than those contained in the Listing;
2)the Agent will not disclose the motivation of the Buyer to buy or the Seller to sell unless authorized by the Buyer or the Seller;
3)the Agent will not disclose personal information about either the Buyer or the Seller unless authorized in writing;
c)The agent will disclose to the Buyer defects about the physical condition of the Property known to the Agent.
*WHEN THERE IS NO AGENCY RELATIONSHIP*
You may also choose to use the services of a REALTOR without having any agency relationship. This might occur, for example, when you are being shown a property by the seller's agent.
The REALTOR you choose to work with in this manner has a legal and ethical duty to provide you with accurate, honest answers to your questions and can provide all these services:
-Explain real estate terms and practices
-Provide and explain forms used
-Assist you in screening and viewing properties
-Inform you of lenders and their policies
-Identify and estimate costs involved in a transaction
-Assist you in establishing your range of affordability
-Prepare offers or counter-offers at your direction
-Present all offers promptly
A REALTOR who is not your agent cannot:
-Recommend or suggest a price
-Negotiate on your behalf
-Inform you of his/her principal's top/bottom line
-Disclose any confidential information about his/her principal unless otherwise authorized
You should not provide a REALTOR who is not your agent with any information that you would not provide directly to his or her principal.
Agency acknowledgement clauses such as the following will be used in the Contract of Purchase and Sale.
The Seller has an agency relationship with _____________________(Agent) and _______________________ (Salesperson). The Buyer has an agency relationship with ______________________(Agent) and _______________________ (Salesperson). The Buyer and Seller have consented to a limited agency relationship with ______________________ (Agent), ____________________(Salesperson) and ______________________ (Salesperson) having signed a Limited Dual Agency Agreement dated ______________, 19__.
*YOUR RESPONSIBILITIES AS A BUYER OR SELLER*
As a buyer or seller you should:
-Carefully read all documents and understand what you are signing.
-If you need special or expert advice, seek other professionals such as lawyers, notaries, accountants, home inspectors, contractors, engineers and surveyors.
The AGENT is the real estate company under which the individual salesperson who is representing you is licensed.
REALTOR, is often used interchangeably with LICENSEE, REAL ESTATE AGENT or SALESPERSON and in B.C., is licensed under the Real Estate Act. A REALTOR can use the term REALTOR if he/she belongs to a local board or association that enforces a strict code of ethics.
The BUYER is often referred to as the Purchaser.
The SELLER is often referred to as the Vendor.
The PRINCIPAL is someone who has engaged an Agent to act for and on his or her behalf either to buy or sell a home.
This information, excerpts from the "WORKING WITH A REAL ESTATE AGENT" pamphlet published by the BRITISH COLUMBIA REAL ESTATE ASSOCIATION, has been designed to explain various types of agency relationships and to help you understand what it all means. If you are still unclear about these concepts, feel free to seek legal counsel.