Agency , What Is It and Why Is it Important To You ?
July 10th, 2007 categories: Buying San Diego Real Estate, San Diego Real Estate Legal, Selling San Diego Real Estate
Agency is in a state of flux at this moment in many parts of the country. Suffice it say, unless you have signed a contract delineating your agency relationship, the agent you are working with may not owe his primary fiduciary responsibility to you. You will be provided very early in our property discussions with an Agency Relationships Disclosure. It will provide a brief discussion about Agency Relationships for each of the ways you may be represented.
As A Buyer, you will be given an agreement called a Buyers Agency Agreement to sign. Agency is one of the more arcane aspects of real estate law in California.
There are several types of agreements out there , so be sure to read and understand what you are signing and if in any doubt,seek counsel from your own legal adviser. For my purposes, I will discuss and illustrate the California Association of REALTORS standard form of Agency Relationships Disclosure.
When you enter into a discussion with any real estate agent regarding a specific piece or pieces of real property ( real estate ), discuss prices on properties, term of any sale or tentative interest in acquiring or just about anything to do with property or even a possible purchase, you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction. Please read this paragraph again. The laws in the state of California are very clear on this aspect of agency. The California law states that the relationship MUST be clearly established before proceeding in the discussion.
There are several sections to our California Association of REALTORS Agency Disclosure Statement.
Sellers Agent A sellers agent under a signed listing agreement with the Seller acts as the agent for the Seller only.
A sellers agent or a subagent of that agent has the following affirmative obligations To the Seller : A fiduciaryA fiduciary duty of utmost care, integrity,honest and loyalty in dealings with the Seller.
To the Buyer and the Seller : A diligent excersise of reasonable skill and care in the performance of the agents duties. A duty of honest and fair dealing and good faith. A duty to disclose all facts know to the agent materially affecting the value or desireability of the property that are not known to, or within the diligent attention and observation of the parties.
An Agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above.
Buyers Agent A selling agent can, with the Buyers consent, agree to act as agent for the Buyer Only. In these situations, the Agent is not the Sellers Agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Seller.
An agent acting only for the Buyer has the following affirmative obligations: To the Buyer : A Fiduciary duty of utmost care, integrity,honesty and loyalty in dealings with the Buyer. To the Buyer and the Seller : A duty of honest and fair dealing and good faith. A duty to disclose all facts know to the agent materially affecting the value of the property that are not know to or with in the diligent attention and observation of, the parties.
An agent is not obligated to reveal to either party any confidential information obtained from the the other party that does not involve the affirmative duties set forth above.
Agent Representing Both Seller Buyer A real estate agent , either acting directly or through one or more associate licensees, can legally be the agent of both Seller and Buyer in a transaction,but only with the knowledge and consent of both Seller and Buyer.
In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: A fiduciary duty of utmost acre, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer, In representing both Seller and Buyer, the agent may not, without the express permission of the respective party, disclose to the other party that seller will accept a price less than the listing price or that the Buyer will pay a price greater tan the the price offered.
The above duties of the agent in a real estate transaction do not relieve a Seller or a Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to to advise about real estate. If Legal or Tax advice is desired, consult a competent professional.
Throughout your real estate transaction you may receive more than one disclosure form,depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship too present you with this disclosure form. You should read it contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction.
However you may be represented you will need to sign a form that contains the above content. Read it carefully. You also need to understand that you may be requested to sign this form several times during the transaction.
So why then do you need Agency? It establishes the fiduciary between you and the person representing you.
