DEADLINE LOOMING IN REAL ESTATE SALES IN MARYLAND
About two months ago, I toured Frederick County in Maryland and Loudoun County in Virginia with a lovely couple considering buying a new home. We visited one of my favorite builders in Ijamsville only to find the builder's model closed. The builder's representative drove up in a hurry, breathless. She had been in real estate school. Further, she was not happy about it. I could only see this new law as a good thing for buyers.
The Maryland Real Estate Commission is flexing it's muscle again. As of October 1, 2007, the sales person in the builder's model or sales trailer, must hold a Maryland real estate license. In the past, the person meeting with prospective buyers in the builder's model or sales trailer was clearly employed by the builder, but that wasn't always clear to prospective home buyers. The person in the model home may have had a license, but buyer's often believed that the sales person could "help" them make home buying decisions. Many builders required that sales persons place their real estate license in "inactive" status while working for the builder. Or, the builder could employ sales persons who had no real estate license.
WHAT DOES THIS MEAN TO BUYERS?
In many cases, not much. If a buyers is working with or represented by a buyer's agent, their agent would have, or should have made it clear that the person working in the builder's model or sales trailer clearly represents the seller, the builder. At the lease, they will be covered by the requirement to provide a buyer with the "Whom Does the Agent Represent" disclosure statement at first scheduled meeting.
I'm not sure how the builders and agents will handle this since "Open Houses" are exempt from that requirement. But, I suspect that it will be required to be provided by the time a person makes an appointment, or "scheduled meeting" to discuss buying the home. I'm anxious to visit a builder's model after October 1 to see how some of the major builders handle this matter.
BUYERS WHO TOUR WITHOUT AN AGENT. One thing the new law will not cover is the matter of buyers visiting new home builders without an agent, registering at the site, and then not being able to bring in a buyer's agent. Buyers do not understand that practice and would like to just tour homes on a Saturday or Sunday afternoon without an agent. That should not prevent buyers from working with an agent, if they so choose. Unfortunately, builders are loathe to cooperate with a buyer's agent and use this procedure to (1) prevent the buyer from bringing in their own agent who may give the buyer advice contrary to what the builder's representative may say, and (2) co-op with the buyer's broker.
Chapter 274 of the Laws of Maryland 2007 (HB1288)
Effective October 1, 2007, sales agents of new home builders in Maryland must hold real estate licenses issued by the Maryland Real Estate Commission. There are three categories of licenses issued by the Commission � broker, associate broker, and salesperson. Salespersons and associate brokers must be affiliated with a real estate brokerage that is headed by a broker. The broker is responsible for supervising the activities of the salespersons and associate brokers; they in turn offer real estate brokerage services through that brokerage. The requirements for obtaining these licenses are found on the Commission's website.
I'm not advocating for agents to send buyers out to find their new home and then waltz in expecting to collect a fee. Often the agent appears with the buyer to register them and then they disappear settlement to collect a commission check. However, buyers are not always cognizant of the builders requirements and don't understand the hazards of registering without their agent. I'm not sure how, or if, the new law will solve this very serious problem. Somewhere along the process the builder is going to have to get the Agency Disclosure signed by the buyer telling the buyer that the sales person sitting across the desk from you "represents" the seller.
UNDERSTANDING WHOM THE AGENT REPRESENTS
Agents Who Represent the Seller
Seller's Agent: A seller's agent works for the real estate company that lists and markets the property for the sellers, or landlords, and exclusively represents the sellers or landlords. That means that he or she may assist the buyer or tenant in purchasing or renting the property, but his or her duty of loyalty is only to the sellers or landlords. The seller pays the seller's agent's fee as specified in a written listing agreement.
FYI. The reason this legislation is finally being implemented along with the licensing of home inspectors is because the Maryland Real Estate Commission is now funded directly by real estate licensing fees and not by the general budget. They did not have the funds in the past to perform these valuable tasks.Courtesy: Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-mail.