Who represents you?? Do you know? Most people don't realize that just because they contacted an agent regarding the purchase or sale of a house doesn't necessarily mean that agent represents them. In Florida there are three forms of brokerage relationships. The three forms are: (A.) Non-representation (B.) Single agent (C.) Transaction broker.
A. Non-representationrequires the following of an agent: 1. Give customer the Notice of Nonrepresentation at first contact 2. Customer is defined as a member of the public who is or may be a buyer or seller of real property and may or may not be represented by a real estate licensee in an authorized brokerage relationship. 3. Duties include: a. Dealing honestly and fairly b. Disclose all known facts that materially affect the value of property which are not readily observable to the buyer c. Accounting for all funds entrusted to the licensee
B. Single agent relationship requires the following of an agent: 1. Single agent is a broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction 2. The party with whom a real estate licensee has entered into a single agent relationship is the principal or client 3. Duties include: a. Dealing honestly and fairly b. Loyalty c. Total Confidentiality d. Obedience e. Full disclosuref. Accounting for all funds g. Skill, care and diligence in the transaction h. Presenting all offers and counteroffers in a timely manner i. Disclosing all known facts that materially affect the value of residential real property that are not readily observable 4. Give Notice single agent relationship before, or at the time of, entering into a listing agreement or an agreement for representation
C. Transaction Broker requires the following of an agent: 1. Transaction broker means a broker who provides limited representation to a buyer, a seller, or both, in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent 2. Transaction brokers provide a limited form of non-fiduciary representation to a buyer, a seller, or both in a real estate transaction 3. Duties include: a. Dealing honestly and fairly b. Accounting for all funds c. Using skill, care, and diligence in the transaction; d. Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer e. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing f. Limited confidentiality, unless waived in writing by a party. This limited confidentialitywill prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or any other information requested by a party to remain confidential g. Any additional duties that are mutually agreed to with a party 4. Give Notice of Non-representation at first contact and the transaction broker disclosure before, or at the time of, entering into a listing agreement or an agreement for representation
This article is focused more on the differences between the Singe Agent and the Transaction Broker {Agent}. Suffice to say that the Non-representation carries the least amount or responsibilities for the agent to look out for the customers best interest and the MOST amount of responsibilities for the the customer to look out for their own best interest.
There are several words in regard to the distinction between the Single Agent and the Transaction Broker that deserve special attention. These are the words fiduciary, confidentiality and full disclosure.
Fiduciary is defined as: An individual, corporation or association, with the legal authority and duty to make decisions regarding financial matters on behalf of the other party.
A Single Agent has a fiduciary responsibility to their clients. A Transaction Broker {Agent} does not. This means that a Single Agent CANNOT represent both the buyer and the seller in a transaction. A Transaction Broker {Agent} CAN because there is no fiduciary responsibility! Do you know of any attorney who can represent both the plaintiff and the defendant. No, because he or she has a fiduciary responsibility to look out for the best interest of his or her client and there is very likely going to be a conflict of interest that arises. You may not know it as the buyer or seller. But it is almost a foregone conclusion that in the process of negotiations some issue will arise that you may or may not, be made aware of, depending on how the agent thinks it will affect the process! Notice that in the responsibilities of the Transaction Broker {Agent} the words full disclosure are absent. That is not an accident!!
We've pretty much covered fiduciary and full disclosure above. Now lets look at confidentiality (Single Agent) and limited confidentiality (Transaction Broker). Read carefully the definitions. If you were a buyer and your agent happened to come across the information somehow that a seller would take less, maybe much less, than the asking price, would you want to know that information as the buyer? It's a given...OF COURSE YOU WOULD!! If you are working with a transaction agent can that agent give you that information...not according to the definition! Does it happen...yes it does. But if the seller finds out that information was given to you with out their permission, it's a lawsuit waiting to happen! Do you want to be in the middle of that and better yet would you like to save thousands on your purchase if possible?? A Single Agent is obligated to give you this information if he or she happens upon it!! And vs/vs if the buyer discloses that he or she is willing to pay more!
So I ask you, as a buyer or seller, what or who would you rather have handling your home purchase or sale?
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