"This is MY buyer's agent, Michelle".........maybe............maybe not.

Real Estate Agent with RE/MAX Shoreline New Hampshire & Maine

Depending on what state Michelle (ficticious name) practices real estate in she may or may not be Mr. Buyer's agent.

For instance in Tennessee where I practice real estate the default status for a real estate licensee is "facilitator", which is a non-agency status.

Tennessee licensees are required by law to disclose at "first substantive contact" their agency status to all potential consumers of real estate services.

In order for Michelle to become Mr. Buyer's official buyer's agent in Tennessee they must both sign a buyer agency agreement (sort of like listing a buyer) which details how Michelle will provide real estate services and how she will be paid for those services.

No agency agreement, no agency; or as my pal uber EBA Tom Early likes to say: "No tickee, no washee!"

The Tennessee Real Estate Commission also requires that the following 3 sentences be in all agency agreements in order for them to be enforceable.

  1. Client should not contact listing agents directly to view property without Broker (their agent)
  2. In the event Client comes into contact with another licensee they should immediately tell that licensee they are represented by a Broker.
  3. If Client purchases a property covered by this agreement from another licensee or a Seller's Agent, or directly from a seller, Client understands he still owes a commission to his Broker as set forth in this agreement. (this is my favorite part) ;-)

I still come in contact with a number of licensees who claim they're a buyer's agent but in fact they're not because they don't have any sort of written agreement with the buyer.

So if your buyer is introducing you or you're representing yourself as their "Agent" you need to make sure you really are.

And of course that REALTOR® Code of Ethics thingie still applies for REALTORS®

Before you sign a buyer (or seller) up to any sort of exclusive agency agreement you have to ask them if they are currently subject to the same agreement with another REALTOR®

Reference Article 16, Standard of Practice 16-9

    "REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service."
    The practice of agency varies greatly from state to state. You need to know how it works in your neck of the woods.
Posted by

Jim Lee , REALTOR®, Certified Residential Specialist (CRS)

http://JimLee.com  RE/MAX Shoreline

100 Market St., Suite #200, , Portsmouth, NH 03801 Phone: (603) 431-1111 x3801

Visit New Hampshire Maine Real Estate.com to search homes, get Seacoast area information, and find out how great living on the New Hampshire and southern Maine Seacoast really is.


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Dusty Irving
My Texas Home Real Estate - Fort Worth, TX
Good Article. Thanks for the information
Jan 18, 2007 03:20 AM #1
Bonnie Erickson
Tangletown Realty - Saint Paul, MN
Even we experienced agents who have been EBAs make this mistake occasionally.  I just got furious with a customer that I have been working with for a year.  He wanted to drive by everything first. . . Well, he was a wanna be investor who I knew was never going to buy a fixer upper because he was also a perfectionist.  He wanted to see the foreclosed property on ABC Street on Friday.  I called for showing appointment.  The house is sold.  I also sent his all the other townhomes listed on ABC Street for comparison.  When I called him back, I suggested we go look at the others on ABC Street.  No, that's not necessary followed by a long discussion about how they weren't going to be ready to buy until February, yada, yada, yada.  Three weeks lated on New Year's Eve I get a voicemail during church.  He wanted to see 2541 ABC Street that afternoon.  Five minutes later another voicemail.  He called the listing agent and the agent said if he couldn't track me down, he's show it to him and give me a referral fee!  And by the way, there's probably an offer coming in this afternoon.  Final slap in the face was the customer called another agent from another open house within the hour of the first voice mail (two hours had lapsed before I returned the call.) and wrote the offer with her.  I'm out because I had no buyer agency agreement although he told all agents involved that he was working with me!  My bad!  If I'd had an agreement I would have sued this guy for the commission.  I still think I might have been able to be paid because of "implied agency" but I don't want to have to hassle for it.  I broke my own rule of never working without a contract (I had gone over it with him, but he wanted to review it at home and had told me he was ready to sign after the foreclosure was sold but before the purchase agreement was written by another agent.)  Frankly, however, I think both agents in the transaction were out of line as he clearly told both of them I was his agent.  He feels awful because he knows he was had by the listing agent, but that doesn't pay the bills!
Jan 18, 2007 04:48 AM #2
Virginia Halter
RE/MAX Signature Properties - Harrisburg, NC

I have a problem with agents who do not discuss agency at first substantive contact.  I had a prospect call me yesterday.  They want to see a condo.  We spoke about what their needs were and how I come into play as their  buyer agent.  I explained agency in full!

They then went on to tell me they had contacted the listing agent of the property (a limited service broker!!!) and had already had two showings of the property by the seller.  No one discussed agency with these poor folks until I came along.  I explained that the listing agent works for the seller and they have a right to their own representation.  When they called the listing agent to tell him they wanted me for their representation he told them that the seller would not want to negotiate the price if they insist on him paying for my representation.

What kind of mess is that???  They were basically threatened by the listing agent!  And, the listing agent discussed negotiations without ever discussing agency.  How dare he!!!

Thankfully my, now, client feels like the listing agent is a bit too shady to work with so we are moving on to the next property.  

With limited service agents not looking after buyers any better than that, it makes me wonder why limited service is even allowed.  Who was supposed to look out for this buyer????

Jan 18, 2007 05:57 AM #3
Ann Cummings
RE/MAX Shoreline - NH and Maine - Portsmouth, NH
Portsmouth NH Real Estate Preferrable Agent

Jim - oh boy, I remember all those "no tickee no washee" conversations from another world....oh boy did some of those posts come flashing back before my eyes!!   ;-)


Jan 18, 2007 06:07 AM #4
Dawn Stephenson

Great info Jim. 

Jan 18, 2007 06:17 AM #5
Dawn Stephenson
Coldwell Banker Wallace & Wallace - Andersonville, TN
Great info Jim
Jan 18, 2007 06:21 AM #6
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Portsmouth NH Realtor, Portsmouth, NH
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