Everyone who is involved in a real estate transaction should understand the unique role of real estate agents. This role has been defined over the years by law and by custom.
Recently, more and more home buyers have sought exclusive representation throughout the real estate transaction process. With the advent of Buyer Agency, many issues have emerged concerning the role of real estate agents.
Is Your Agent
Really Your Agent? As soon as you begin a discussion with me about buying, selling or renting real property (such as when you call me on the phone, Contact Me, or even stop me on the street) ... or any other real estate agent , you should understand what type of agency relationship or representation exists between us. You can now download and print the Understanding Whom Real Estate Agents Represent (PDF) form right from my site. I'll be glad to answer any questions that you have about this document. I will need a copy of this form signed by you before we can begin a serious search for properties in the State of Maryland. There are four kinds of agency relationships, each of which will be outlined separately below. They are: Before examining these relationships in further details, though, it would be a good idea to review some basic definitions (you might also want to review my Glossary of Real Estate Terms). Basic Definitions An Agent is one who represents another, called the Principal, in dealing with third persons. Such representation is called Agency. The difference between a client and a customer further defines the nature of agency relationships. A Client is a buyer or seller who is represented by an agent. The agent provides advice and also owes the principal the duties of reasonable care: loyalty, disclosure, confidentiality, diligence and accounting. A Customer is entitled to honest treatment, including disclosure of material adverse facts that are known to the agent. When you initiate a discussion with me, you are treated as a Customer until such time as you agree to be represented by me as my Client. At this point, you should refrain from discussions with other real estate agents.
Seller Agency is the "traditional" agency relationship. Simply put, the listing and cooperating ("selling") agents are agents of the seller. Their duties of reasonable care are to the seller. Seller Agents Are Obligated by a Code of Ethics As your Seller's Agent, I am required to:
How Seller Agency Affects the Buyer The Seller's Agent can be helpful to the buyer in a variety of ways. As your Seller's Agent, I can show potential buyers available properties, describe the attributes and amenities of properties, provide information about sources of financing, and submit the buyer's offer to purchase. These are called "ministerial acts." They do not bring about an agency relationship between me and the buyer and will help me make the sale of your property go more smoothly.
Just as a written Listing Agreement is required for a real estate agent to represent the seller, a written Buyer Representation Agreement is required for a real estate agent to represent a buyer. Many agents these days will not show homes to potential buyers who are not pre-qualified for a mortgage or who have not signed the Buyer Representation Agreement. Until I have that signed Agreement, I will treat you as a Customer (as outlined above), and there are limits to what I will do for you. I'll be happy to answer any questions that you may have about it. You can now download and print the Buyer Representation Agreement right from my site. You can then complete it and fax it to my office at 301-932-8475 so that we can get started more quickly. I will need to know that you have read his agreement before we can start a serious search for properties. Under Maryland real estate law, this agreement must be dated prior to the submission of any offer for purchasing a property. As your Buyer's Agent, I owe you loyalty, disclosure, complete confidentiality, accurate accounting, reasonable care and diligence. I must disclose to you all material facts, unless prevented by confidentiality or other legal requirements, such as fair housing laws. Presumed Buyer Agent Under Maryland law, I (and all other real estate agents) am a presumed buyer's agent unless you or I determine otherwise. There are certain actions (outlined below) that will automatically terminate the Presumed Buyer Agency and demand that you be designated as my Client (I am then your Buyer's Agent) ... or as my Customer. If I am representing you as a presumed buyer's agent, you must sign a buyer representation agreement when you decide to write an Offer to Purchase real estate (a house, townhouse, condominium, land, etc.). If you wish to see a listing by another Long & Foster Agent, you must sign a Consent for Dual Agency form. In that event, I would then become an Intra-Company Agent. Buyer's Agents are Obligated to Reveal Information to Buyers As your Buyer's Agent, I am obligated to reveal to you:
This includes broad knowledge and experience in real estate and the progessional integrity and innovation that have made Long & Foster the number one real estate company in the five-state Mid-Atlantic region.
When you, as a buyer or tenant client of mine, become interested in a property that is listed by Long & Foster Real Estate, Inc., the real estate company (the broker) becomes a dual agent. Because the company has a legal obligation to represent both parties, and may know confidential information about one party that would be helpful to the other party during any negotiations, this is a limited agency representation. You can now download and print the Consent For Dual Agency (PDF) form right from my site. I'll be glad to answer any questions that you have about this document.
When both the seller and the buyer (or landlord and tenant) agree to dual agency by signing a Consent for Dual Agency form, Long & Foster Real Estate, Inc. becomes the dual agent and will assign one agent to represent the seller or landlord and another agent to represent the buyer or tenant. Intra-company agents can provide the same services to their clients as exclusive Seller's Agents or Buyer's Agents, including advising their clients as to price and negotiation strategy.
Disclosure Agency disclosure law requires real estate agents to provide written disclosures to both the seller and the buyer, explaining who the agent is representing and what the agent's responsibilities are. These written documents are prepared by the Maryland Real Estate Commission. The duties of the agent in a real estate transaction do not relieve the buyers or sellers from the responsibility to protect their own interests. All agreements should be read carefully to ensure taht they adequately express your understanding of the transaction. Also, as a principal, you should ensure that any existing relationship is disclosed to other principals and their agents.
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