Beaware:Active Rain Addiction Day 6-State of Ct Law of Agency for Dummies
This is the sixth entry in a 30 day challenge to write informative content for thirty days in a row. I have blogged about "Holding a Productive Open House" and chronicled my search for wifi while on vacation complete with scenic pictures of course.
The State of Ct, when it comes to the Law of Agency, could be called "The State of confusion". We offer Exclusive right to represent both buyer or seller, dual agency representation to represent both buyer and seller, and designated representation where we designate another agent to represent the second party in a transaction that we are involved in. Finally, there is an unrepresented party agreement. Whew!!! One of these forms must be signed before any significant action is taken on a clients behalf. The most common is the Exclusive Right to Represent.
Exclusive Right to Represent (buyer or Seller)---we must act in a fiduciary capacity which means we will advise and consult, educate and guide, be involved in the decision making process and use our judgement and experience to assist you in either buying or selling. Representation gives you these benefits:
A. Obedience: To lawful instructions
B. Loyalty: We put your best interests before our own
C. Disclosure: Whatever we know...You know
D. Confidentiality: Our highest responsibilty when we represent you
E. Accountability : For your money and paperwork
F. Reasonable skill and care in all our affairs on your behalf.
When someone in our office has listed a property that our buyer might be interested in we must sign a "Dual Agency Agreement". You recall that at this point both parties would have already signed an Exclusive Right to Represent Agreement. Since, as agents of the brokerage, we have signed these agreements for the brokerage, we have a problem in that "we cannot serve two masters" at the same time. The dual agency agreement states that the brokerage firm must keep everyone's confidences and treat all parties to the transaction fairly. However, sometimes a buyer or seller wants to keep the original exclusive agreement and not enter a dual agency agreement. Therefore, the brokerage firm would now designate a broker from within the firm to represent the second party. These two agents would be extra careful to have no public discussions of the transaction(in or out of the office) that the other agent might over hear.
Finally, there is the unrepresented party agreement. This form is most commonly used at a Public Open House where the buyer doesn't know the Listing agent and might be reluctant to enter an exclusive right to represent agreement. Therefore this buyer would go forward knowing that he represents himself and that the listing agent represents the best interests of the seller only. Of course the agent still needs to treat the buyer fairly and honestly.
Well that was easy to understand wasn't it!!!!!!!My team, The Beninson Associates, realize that understanding agency might be a bit confusing to the general public because we know it is confusing to agents in general too!!! We offer a buyer counselling session, at our first meeting and before looking at any properties, where we discuss not only agency but the entire buying process and what to expect. We also offer a market analysis that describes the entire selling process and includes an agency discussion too. then, in the heat of negotiations, we don't have our clients(sellers or buyers) wondering whether we are representing them or not. Our goal is to have clients who are well informed, well advised and can take all the information and make a decision that is in their best interests.
In conclusion, we recommend meeting with an experienced agent, hopefully someone from The Beninson Associates, who will explain the entire process and be with you from start to finish as your trusted Real Estate Advisor. Our business depends on the referrals from satisfied clients and each year over 90% of our business comes from past or current clients who were kind enough to refer us.
PS I didn't have the heart to go into Exclusive Agency and Open listing Agreements(very uncommon) but would be happy to discuss those options with any perspective buyer or seller client too. They exist but are almost extinct.