Understanding Buyer Agency
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ONLINE INFORMATION WARNING:
The Internet is a fabulous tool for gathering information. But what the Internet can NEVER do is interpret it.
Please use online property search tools with care: relying on property data alone, without the context that a professional can provide, will usually lead to incorrect and expensive mistakes. And, making decisions regarding the purchase or sale of your largest asset with online information alone can often lead to disastrous results. |
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What follows below is taken directly from the Massachusetts Mandatory Licensee-Consumer Relationship Disclosure form.
(Now don’t let your eyes glaze over; if you’re going to get your best value
when you buy a home you need to know who’s representing whom!) |
CONSUMER INFORMATION AND RESPONSIBILITY:
Whether you are the buyer or seller you can choose to have the advice, assistance and representation of your own agent who works for you. Do not assume that a real estate agent works solely for you unless you have an agreement for that relationship. With your consent, agents from the same firm may work with a buyer and seller in the same transaction. These agents are referred to as dual agents.
Also, a buyer and seller may be represented by agents in the same real estate firm as designated agents. The "designated seller or buyer agent" is your sole representative. However where both the seller and buyer provide written consent to have a designated agent represent them then the agent making such designation becomes a "dual agent" for the buyer and seller. All real estate agents must, by law, present properties honestly and accurately. They must also disclose known material defects in the real estate.
The duties of a real estate agent do not relieve the consumers of the responsibility to protect their own interests. If you need advice for legal, tax, insurance or land survey matters it is your responsibility to consult a professional in those areas. Real estate agents do not have a duty to perform home, lead paint or insect inspections nor do they perform septic system, wetlands or environmental evaluations. |
Massachusetts requires a mandatory disclosure of agency at the first meeting between a potential buyer or seller and a real estate agent. At this first meeting, the agent is required to present a Licensee-Consumer Relationship Disclosure, which outlines the five types of agency. In 2005, the agency laws in Massachusetts underwent major changes. There are now five types of agency representation and what follows is a summary these relationships:
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Seller's Agent
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Buyer's Agent
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Facilitator (Non-Agent)
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Dual Agent
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Designated Agent
SELLER'S AGENT: A seller can engage the services of a real estate agent to sell his or her property (called the listing agent) and the real estate agent is then the agent for the seller, who becomes the agent's client. This means that the real estate agent represents the SELLER. The agent owes the seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put the SELLER'S interest first and negotiate for the best price and terms for their client, the seller.
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BUYER'S AGENT: A buyer can engage the services of a real estate agent to purchase property (called the buyer agent) and the real estate agent is then the agent for the buyer, who becomes the agent's client. This means that the real estate agent represents the BUYER. The agent owes the buyer undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put the BUYER'S interest first and negotiate for the best price and terms for their client, the buyer.
FACILITATOR (NON-AGENT): When a real estate agent works as a facilitator that agent assists the seller and buyer in reaching an agreement but does not represent either the seller or buyer in the transaction. The facilitator and the broker with whom the facilitator is affiliated owe the seller and buyer a duty to present each property honestly and accurately by disclosing known material defects about the property and owe a duty to account for funds. Unless otherwise agreed, the facilitator has no duty to keep information received from a seller or buyer confidential. The role of facilitator applies only to the seller and buyer in the particular property transaction involving the seller and buyer. Should the seller and buyer expressly agree a facilitator relationship can be changed to become an exclusive agency relationship with either the seller or the buyer.
DESIGNATED SELLER'S AND BUYER'S AGENT: A real estate agent can be designated by another real estate agent (the appointing or designating agent) to represent either the buyer or seller, provided the buyer or seller expressly agrees to such designation. The real estate agent once so designated is then the agent for either the buyer or seller who becomes their client. The designated agent owes the buyer or seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put their client's interests first and negotiate for the best price and terms for their client. In situations where the appointing agent (usually the broker) designates another agent to represent the seller and an agent to represent the buyer, then the appointing agent becomes a dual agent. Consequently a dual agent cannot satisfy fully the duties of loyalty, reasonable care, disclosure, obedience to lawful instruction which is required of an exclusive seller or buyer agent. The dual agent does not represent either the buyer or seller solely; only your designated agent represents your interests.
DUAL AGENT: A real estate agent may act as a dual agent representing both the seller and buyer in a transaction but only with the express and informed consent of both the seller and buyer. Written consent to dual agency must be obtained by the real estate agent prior to the execution of an offer to purchase a specific property. A dual agent shall be neutral with regard to any conflicting interest of the seller and buyer. Consequently a dual agent cannot satisfy fully the duties of loyalty, reasonable care, disclosure, obedience to lawful instruction which is required of an exclusive seller or buyer agent. A dual agent does, however, still owe a duty of confidentiality of material information and accounting for funds.
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