Know Who’s on Your Side – The Brokerage Relationship Disclosure
Understanding the buyer’s and seller’s agents relationships within a transaction is your personal power play. Early in the conversation with any agent you should receive a copy of the Maine Real Estate Commission’s Real Estate Brokerage Relationship Form and have an in-depth conversation about it. This one page disclosure lays out in detail the difference between the customer relationship and the client relationship. It also outlines who represents whom in a transaction.
At the beginning of the relationship with a real estate agent or broker you’re a customer. To you as a customer an agent or broker can provide general market information as well as some specific information on any home. They’re also required to disclose any material defects regarding the physical condition of a property. They’ll treat a you honestly and fairly and act lawfully as they work with you. However, an agent or broker is not required to promote your interest, or keep your confidential information or bargaining position which is an important distinction between customer and client.
Ideally, the relationship progresses to a client level position. This occurs when you sign a buyer or seller representation agreement. At this point you can expect the agent or broker to perform the terms of that agreement with skill and care. Additionally, the agent or broker will promote your interest over other parties within a negotiation and transaction. This includes specific market information, strategic guidance and the best price and terms for you. They’ll use this information to negotiate on your behalf. They’ll also keep your strategy, motivation and bargaining position confidential as they work for you, including your very best price and terms.
Of the three common types of agency allowed in the state of Maine Kern Real Estate practices Single Agency and Disclosed Dual Agency.
From time to time an agent will represent both a seller and a buyer in a transaction or Disclosed Dual Agency. In this situation, it’s important to understand that both Seller and Buyer clients need to agree to this in writing. During a Disclosed Dual Agency transaction the agent or broker representing both sides cannot share confidential information, negotiating strategy, or what one party will ultimately agree to regarding price and terms of a contract. However, with skill and care, the agent or broker can share information and present multiple options to help both parties navigate the entire process.
Make sure to sit down and have a detailed conversation with your agent prior to entering into an agreement. Your understanding and ultimate use of these relationships empowers you as you navigate the process of buying or selling a home.