Client or Customer – Does it Really Matter?
Thinking of buying or selling a home in Crofton Maryland?
Yes, it really does matter whether you're a "client" or "customer" of your agent. There's a BIG difference! Yvette Chisolm did such a good job of explaining this to her Montgomery County clients that I'm going to refer my Anne Arundel County clients to her for more on this hot topic in Maryland:
Client or Customer – Does it Really Matter? Often we hear the words interchangeably – she is my client...she is a customer. Which is it? Does it matter? You BET! The Code of Ethics from the National Association of REALTORS devotes Article 1 to Duties to Clients and Customers.
To summarize the difference is:
CUSTOMER: no contractual relationship with REALTOR and/or REALTOR’s firm
Examples of Customer-Level Services when working with a buyer:
- Provide material facts
- Negotiate in the Seller’s Interest
- Provide solutions that benefit the Seller
- Provide information that only supports the seller’s asking price
- Keep the focus on the Seller’s property (not the buyer’s needs)
- Maintain loyalty and confidentiality for the Seller
- Everything you know about the buyer’s feelings and position must be told to the seller
- Provide information, resources, but not advice
- Be honest, but not necessarily fair (after all, they are representing the seller's interest)
CLIENT: someone the REALTOR has an agency or legally recognized relationship with
Examples of Client-Level Services when working with a buyer:
- Provide material facts, information to the buyer’s advantage, and advice
- Negotiate in the Buyer’s Interest
- Provide solutions that benefit the Buyer
- Provide a broad range of information and advice about negotiating price
- Show a range of property for the buyer that best meets the buyer’s needs
- Keep information and strategies confidential
- Provide information, resources, and suggestions and advice.
- Be honest and represent the buyer's interest
Q: Is someone a client or customer - if you are showing homes to a buyer without a buyer broker agreement?
A: For example, in Maryland there is a law of “presumed buyer agency” to protect the consumer, the agent has a duty to provide client-level services, but in absence of a written Buyer Broker Agreement, the consumer has no obligation to the agent. However, if the buyer doesn’t want you to represent them, you are working as a sub-agent for the seller and must provide customer-level services. The agent is required by law to present an agency disclosure to clarify who they represent.
Q: When you show your brokerage’s listings without a Buyer Broker Agreement- are you putting yourself and your company at risk for undisclosed dual agency or violating the seller’s agency relationship? What about the buyer?
A: Maryland makes it so easy. You must provide the consumer with a disclosure and consent form for dual agency BEFORE you show any of your brokerage’s listings. If you don’t have consent – you are likely practicing undisclosed dual agency. Without the right disclosure you are – putting everyone at risk. Remember, at all times it is extremely critical for the buyer to know if you are representing them or the seller and have consent and acknowledgment if the brokerage is representing both buyer and seller in the transaction, otherwise you can have undisclosed dual agency. However, if the buyer doesn’t want you to represent them, remember you are working for the seller and behave accordingly!
Q: As a consumer why wouldn’t you want someone to represent your interest? Will you get a better deal?
A: I don’t know why a consumer wouldn't want someone to represent their interest. Why would the consumer get a better deal, the agent is looking out for the seller and it is their fiduciary obligation to make sure the seller gets the best deal the seller can get.
NOTE: The State of Maryland also makes it clear that an agent can only represent one party – buyer or seller – pick one.Client or Customer - it DOES really matter!
Agency relationships are regulated by law in each state/jurisdiction and this blog is intended for information use only and general discussion. This is not intended as legal or financial advice and should not be relied on as such. Please consult an appropriate professional such as an attorney or CPA is you should have specific or legal or financial questions.
Yvette Chisholm, Associate Broker, MD, DC, VA
Alan Bruzee, Associate Broker, MD, DC, VA
Long & Foster Real Estate, Inc.
Rockville/King Farm Office 301-548-9700
402 King Farm Blvd #150 Rockville, MD 20850
Telephone: 301-758-9500
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