A Discussion about Realtors(r) and Agency Relationships

By
Real Estate Agent with Coldwell Banker Evergreen Realty

In Oregon Realtos(r) are required to give this pamphlet to all potential clients.  The first thing I am going to start with is a copy of the pamphlet.  After you read the pamphlet, I will discuss some of the questions that clients have had.  As a Realtor(r) in Oregon, not only is it my duty, but it is my privilege to discuss this pamphlet with my clients. 

Here is the pamphlet we as Realtors(r) in Oregon are required to give potential clients: 

---------------------------------------------------------------------------------------------beginning of pamphlet--------

                                                         Oregon Agency Disclosure Pamphlet 

This pamphlet describes agency relationships and the duties and responsibilities of real estate licensees in Oregon. This pamphlet is informational only and neither the pamphlet nor its delivery to you may be construed to be evidence of intent to create an agency relationship.

Real Estate Agency Relationships

An "agency" relationship is a voluntary legal relationship in which a real estate licensee (the "agent") agrees to act on behalf of a buyer or a seller (the "client") in a real estate transaction. Oregon law provides for three types of agency relationships between real estate agents and their clients:

  • Seller's Agent: Represents the seller only;
  • Buyer's Agent: Represents the buyer only;
  • Disclosed Limited Agent: Represents both the buyer and seller, or multiple buyers who want to purchase the same property. This can be done only with the written permission of both clients.

The actual agency relationships between the seller, buyer and their agents in a real estate transaction must be acknowledged at the time an offer to purchase is made. Please read this pamphlet carefully before entering into an agency relationship with a real estate agent.

Duties and Responsibilities of an Agent
Who Represents Only the Seller or Only the Buyer

Under a written listing agreement to sell property, an agent represents only the seller unless the seller agrees in writing to allow the agent to also represent the buyer. An agent who agrees to represent a buyer acts only as the buyer's agent unless the buyer agrees in writing to allow the agent to also represent the seller. An agent who represents only the seller or only the buyer owes the following affirmative duties to their client, other parties and their agents involved in a real estate transaction:

  1. To exercise reasonable care and diligence;

  2. To deal honestly and in good faith;

  3. To present all written offers, notices and other communications in a timely manner whether or not the seller's property is subject to a contract for sale or the buyer is already a party to a contract to purchase;

  4. To disclose material facts known by the agent and not apparent or readily ascertainable to a party;

  5. To account in a timely manner for money and property received from or on behalf of the client;

  6. To be loyal to their client by not taking action that is adverse or detrimental to the client's interest in a transaction;

  7. To disclose in a timely manner to the client any conflict of interest, existing or contemplated;

  8. To advise the client to seek expert advice on matters related to the transactions that are beyond the agent's expertise;

  9. To maintain confidential information from or about the client except under subpoena or court order, even after termination of the agency relationship; and

  10. When representing a seller, to make a continuous, good faith effort to find a buyer for the property, except that a seller's agent is not required to seek additional offers to purchase the property while the property is subject to a contract for sale. When representing a buyer, to make a continuous, good faith effort to find property for the buyer, except that a buyer's agent is not required to seek additional properties for the buyer while the buyer is subject to a contract for purchase or to show properties for which there is no written agreement to pay compensation to the buyer's agent.

None of these affirmative duties of an agent may be waived, except #10, which can only be waived by written agreement between client and agent.

Under Oregon law, a seller's agent may show properties owned by another seller to a prospective buyer and may list competing properties for sale without breaching any affirmative duty to the seller. Similarly, a buyer's agent may show properties in which the buyer is interested to other prospective buyers without breaching any affirmative duty to the buyer.

Unless agreed to in writing, an agent has no duty to investigate matters that are outside the scope of the agent's expertise.

Duties and Responsibilities of an Agent
Who Represents More than One Client in a Transaction

One agent may represent both the seller and the buyer in the same transaction, or multiple buyers who want to purchase the same property only under a written "Disclosed Limited Agency" agreement, signed by the seller, buyer(s) and their agent.

When different agents associated with the same real estate firm establish agency relationships with different parties to the same transaction, only the principal broker (the broker who supervises the other agents) will act as a Disclosed Limited Agent for both the buyer and seller. The other agents continue to represent only the party with whom the agent already has an established agency relationship unless all parties agree otherwise in writing. The supervising principal broker and the agents representing either the seller or the buyer have the following duties to their clients:

  1. To disclose a conflict of interest in writing to all parties;

  2. To take no action that is adverse or detrimental to either party's interest in the transaction; and

  3. To obey the lawful instruction of both parties.

An agent acting under a Disclosed Limited Agency agreement has the same duties to the client as when representing only a seller or only a buyer, except that the agent may not, without written permission, disclose any of the following:

  1. That the seller will accept a lower price or less favorable terms than the listing price or terms;

  2. That the buyer will pay a greater price or more favorable terms than the offering price or terms; or

  3. In transactions involving one-to-four residential units only, information regarding the real property transaction including, but not limited to, price, terms, financial qualifications or motivation to buy or sell.

No matter whom they represent, an agent must disclose information the agent knows or should know that failure to disclose would constitute fraudulent misrepresentation. Unless agreed to in writing, an agent acting under a Disclosed Limited Agency agreement has no duty to investigate matters that are outside the scope of the agent's expertise.

You are encouraged to discuss the above information with the agent delivering this pamphlet to you. If you intend for that agent, or any other Oregon real estate agent, to represent you as a Seller's Agent, Buyer's Agent, or Disclosed Limited Agent, you should have a specific discussion with him/her about the nature and scope of the agency relationship. Whether you are a buyer or seller, you cannot make a licensee your agent without their knowledge and consent, and an agent cannot make you their client without your knowledge and consent.

------------------------------------------------------------------------------end of pamphlet--------------------------

Objections I have come across when giving this pamphlet out is the misunderstanding that by giving this pamphlet to my potential clients I am putting them into a contractual obligation.  This is not the case.

"This pamphlet describes agency relationships and the duties and responsibilities of real estate licensees in Oregon. This pamphlet is informational only and neither the pamphlet nor its delivery to you may be construed to be evidence of intent to create an agency relationship." 

I am required by law, to give you this pamphlet.  If I don't give you a copy of this pamphlet, I could get in trouble.  Please don't think I am trying to make you use my services whan I give you this pamphlet.  The Oregon Real Estate Board and I want you to understand my role as a Realtor(r).

to be continued......

Next addition to this discussion will be:

Duties and Responsibilities of an Agent
Who Represents Only the Seller or Only the Buyer

close

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Rainer
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Natalie Bagayas
Sutton Real Estate - Clackamas, OR

How often do you have objections to receiving an agency disclosure pamphlet? I guess I have really had it happen. I generally tend to hand it to my clients, briefly recap the brochure and tell them I am "recapping" and to read it. I also tell them to let me know if they have any questions and that one of the first things they do on a sales agreement is finalize who is representing who in the transaction.

I also think there is a certain point in time that you give this flyer to your clients. The first time you meet them at an open house maybe not so appropriate, besides a then being a lead they would tend to be more objective, as when you solidify a client they should trust you more.

You may be opening too many doors by translating something as simple as this brochure. They need to read and understand it themselves and not take your word for it.

Jan 16, 2007 11:26 AM #1
Rainer
212,384
Mark Miller
Cascade Sotheby's International Realty - Lake Oswego, OR
Client-Focused Representation in All Price Ranges

I give the Agency Disclosure Pamphlet when I first meet with a new client or prospect.

Most people that come through my open house to do not get the pamphlet.  There are times at an open house when the conversation gets a little more involved, I realize they are prospects and I give them the pamphlet.  They may not choose to have anything to do with me but I acted professionally and did my duty by giving them the pamphlet.

When I meet someone via the internet, or phone, I give the pamphlet when I mail them information.  If I direct them to my web site at Hasson, the pamphlet is posted there. 

I tell them, "The state requires I give this to you.  It explains the relationships between agents and their clients.  Let me know if you have any questions after you read it." 

When I begin working with clients I also give the Oregon Property Buyer Advisory along with a mold disclosure and a Measure 37 disclosure.  I tell them, "These are important to read and be aware of.  Let me know if you have any questions and when we make an offer or put a transaction together we will revisit some of it."  I have them initial a copy of the pamphlet at the time I take the listing or write the offer.

I haven't had anyone express displeasure in receiving the pamphlet or any of the other papers I give them.

Jan 19, 2007 04:51 AM #2
Rainer
11,739
Brenda Brown
Coldwell Banker Evergreen Realty - Tillamook, OR
e-PRO

Thank you so much for your responses. 

I have the pamphlet available at open houses, but open houses don't work here.  At most we have 1 maybe 2 people show up.  My time is better utilized elsewhere.  I wish that open houses would work in my area, but I'm sorry to say that every Realtor(r) I have discussed open houses with in this area have had similar experiences with them. 

As I discussed, I have in fact, had more than one client get extremely upset with me for giving them the pamplhlet.  After explaining that this is not a contract, usually they understand.

Natalie's comment: "You may be opening too many doors by translating something as simple as this brochure. They need to read and understand it themselves and not take your word for it."  is  a very good point, so perhaps rather than having me discuss the pamphlet in detail, let's discuss what these parts of the pamphlet mean to each of us. 

What do you think it means when it says:

To exercise reasonable care and diligence; ?

(by the way I don't want to translate it -I'm not a lawyer. I just want to discuss it.  You know, see if we're all on the "same page" as to what this all means)

 

 

Jan 19, 2007 12:18 PM #3
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Rainer
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Brenda Brown

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