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AGENCY RELATIONSHIPS IN A REAL ESTATE TRANSACTION

AGENCY RELATIONSHIPS IN A REAL ESTATE TRANSACTION. WHAT ARE THE OPTIONS. CUSTOMER/FACILITATOR SELLER - REPRESENTED BY A SELLERS BROKER - AGENT BUYER - REPRESENTED BY A BUYERS BROKER - AGENT DUAL AGENCY – SAME BROKER, BOTH PARTIES. WHY HIRE AN AGENT?. REPRESENT YOUR BEST INTEREST

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AGENCY RELATIONSHIPS IN A REAL ESTATE TRANSACTION

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  1. AGENCY RELATIONSHIPS IN A REAL ESTATE TRANSACTION

  2. WHAT ARE THE OPTIONS • CUSTOMER/FACILITATOR • SELLER - REPRESENTED BY A SELLERS BROKER - AGENT • BUYER - REPRESENTED BY A BUYERS BROKER - AGENT • DUAL AGENCY – SAME BROKER, BOTH PARTIES

  3. WHY HIRE AN AGENT? • REPRESENT YOUR BEST INTEREST • KNOWLEDGE OF THE MARKET • KNOWLEDGE OF THE LAW • ABILITY TO NEGOTIATE • ABILITY TO COMMUNICATE/COOPERATE WITH COLLEGUES • YOUR REQUIREMENTS!

  4. WHAT DOES AGENCY REALLY MEAN? • AN AGENT IS AN INDIVIDUAL WHO REPRESENTS THE PRINCIPAL WITH THIRD PARTIES. AGENT THIRD PARTY PRINCIPAL

  5. WHAT ARE THE FIDUCIARY DUTIES OF AN AGENT? • LOYALTY • OBEDIENCE • DISCLOSURE • CONFIDENTIALITY • REASONABLE CARE • ACCOUNTING

  6. WHAT DOES MINNESOTA LAW REQUIRE • EARLY DISCUSSION WITH CONSUMERS • WHO DOES THE REALTOR REPRESENT • THE RIGHTS OF THE CONSUMER • THE RESPONSIBILITIES OF THE CONSUMER • ACKNOWLEDGE RECEIPT OF THE “AGENCY RELATIONSHIP FORM”

  7. UNTIL THE BUYER MAKES A CHOICE ON REPRESENTATION, THE BUYER WILL BE TREATED AS A “CUSTOMER” • VERY SIMILAR TO BUYING A CAR, AN APPLIANCE OR A PAIR OF SOCKS AT J C PENNY’S

  8. HOW SHOULD THE “SELLERS BROKER” ACT? • SELLERS BROKER LISTS THE PROPERTY • ACTS ON BEHALF OF THE SELLER • OWES FIDUCIARY DUTIES TO THE SELLER ONLY

  9. WHAT ARE THE FIDUCIARY DUTIES OF A SELLERS AGENT? • LOYALTY • OBEDIENCE • DISCLOSURE • CONFIDENTIALITY • REASONABLE CARE • ACCOUNTING

  10. ADDITIONAL RESPONSIBILITIES • MUST DISCLOSE TO THE BUYER ANYAND ALL MATERIAL FACTS THAT COULD AFFECT THE BUYER’S ENJOYMENT OF THE PROPERTY THAT THE AGENT AND/OR SELLER HAS KNOWLEDGE OF.

  11. IF THE BUYER IS NOT REPRESENTED! • SELLERS BROKER MUST TELL THE SELLER ALL INFORMATION THE BUYER MAY HAVE TOLD THE AGENT. . . THE AGENT IS WORKING FOR THE SELLER! • BUYER WILL RECEIVE NO ADVICE OR COUNSEL FROM THE SELLERS BROKER/SALESPERSON

  12. HOW SHOULD THE BUYERS BROKER ACT? • A BUYER MAY ENTER INTO AN AGREEMENT TO HAVE A BROKER/SALESPERSON REPRESENT THE BUYER AND ACT ON THE BUYERS BEHALF. • WHO PAYS THE BROKER IS NOT AN ISSUE OF AGENCY! • SAME FIDUCIARY DUTIES AND OWES THESE DUTIES TO THE BUYER ONLY!

  13. BUYER MAY SIGN AGREEMENT FOR REPRESENTATION • CONTRACT FOR EXCLUSIVE RIGHT TO REPRESENT THE BUYER • CONTRACT FOR NON-EXCLUSIVE RIGHT TO REPRESENT THE BUYER • NON-EXCLUSIVE MEANS YOU CAN HIRE SEVERAL BROKER/AGENTS TO WORK FOR YOU AT THE SAME TIME • NEITHER ONE ALLOWS YOU TO BUY A FSBO WITHOUT COMPENSATION

  14. WHAT ARE THE FIDUCIARY DUTIES OF A BUYERS AGENT? • LOYALTY • OBEDIENCE • DISCLOSURE • CONFIDENTIALITY • REASONABLE CARE • ACCOUNTING

  15. WHAT IS A DUAL AGENT • “REPRESENTS” BOTH SIDES IN A REAL ESTATE TRANSACTION • REQUIRES INFORMED CONSENT OF BOTH BUYERS AND SELLERS • ROLE OF “DUAL AGENT” LIMITS THE LEVEL OF REPRESENTATION TO BOTH PARTIES. • MAY NOT ADVOCATE FOR EITHER SIDE

  16. NEITHER THE BUYER OR SELLER SHOULD DISCLOSE “CONFIDENTIAL” INFORMATION TO THE “DUAL AGENT” • LIMITS THE WORDS AN AGENT MAY USE TO THE FOLLOWING: • WOULD YOU LIKE TO ACCEPT, REJECT, OR COUNTEROFFER. • DUAL AGENCY CREATED BY THE LEGISLATURE! ! !

  17. DUAL AGENCY PITFALL! • . Dual agency is really no agency at all. Although most people contract with a real estate agent for their expertise and assistance, a dual agent must legally withhold his or her expertise and assistance to a large extent because the agent is actually representing two competing sides of a transaction at one time (the buyer and the seller) and is not supposed to promote the interests of one party to the detriment of the other.

  18. FACILITATOR • FACILITATES THE TRANSACTION • NO REPRESENTATION TO EITHER BUYERS OR SELLERS • NO FIDUCIARY DUTIES TO EITHER PARTY, EXCEPT CONFIDENTIALITY • MUST NOT VIOLATE THE STATE LAW - DISCLOSURE.

  19. REALITY • BUYERS MAYBE SHOULD HAVE THEIR OWN AGENT • SELLERS MAYBE SHOULD HAVE THEIR OWN AGENT • DUAL AGENCY MAYBE SHOULD BE AVOIDED • BEING TREATED AS A CUSTOMER MAYBE IS BETTER THAN DUAL AGENCY-AT LEAST YOU KNOW WHERE YOU STAND!

  20. SUMMARY • BUYING AND SELLING REAL ESTATE IS NOT SIMPLE • REALTORS ARE MORE CONSCIOUS OF THEIR CLIENTS AND FIDUCIARY RESPONSIBILITIES THAN EVER BEFORE • BUYERS AND SELLERS MUST UNDERSTAND THEIR RIGHTS, RESPONSIBILITIES AND OPTIONS

  21. THE END JIM MINER, REALTOR

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