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Seller Representation

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					    1. Agency Relationships

    In this chapter
       Evolution of buyer representation
       Parties in a real estate transaction
       Types of relationships between real estate
        brokerage companies and consumers



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    Buyer Representation
     The practice of real estate
      practitioners (brokers and their
      agents) representing the buyer as a
      client
     The agent of the buyer




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    Evolution of Buyer
    Representation

     Seller-representation was default of
      most MLSs and state regulations
      until ’90s
     Became “out of sync” with realities
      of marketplace


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     Consumer Survey
        Most buyers thought they were
         represented by the seller’s agent

        Most buyers shared confidential
         information with the seller’s agent
         because they though the agent was
         working their behalf
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     Seller Subagency
      Any agent who brought a buyer to
       the transaction was considered an
       agent of the seller
      has virtually disappeared because
       brokers do not offer or accept it
      Vicarious liability disappearing too -
       by state statute or practice

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     NAR Policy Changes
      MLS policy changed to blanket offer
       of “cooperation and compensation”
      NAR promotion of 9-point legislative
       model:
         – clarify agency relationships
         – allow designated agency & clarify dual
           agency duties
         – eliminate vicarious liability
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     Market Trends
        Percentage of buyers with a buyer
         representation agreement

         1999 – 47%

         2006 – 64%
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     Parties in a Real Estate
     Transaction
      Client/principal
      Broker
      Agent
      Customer
      Transaction broker
      Finder


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       Agency Relationships
     Agency Relationships    Types of Agency        Agent
         Created by           Relationships       Represents



      Express Written         Single Agency     Buyer OR Seller
        Agreement

          Implied
         Agreement             Dual Agency      Buyer AND Seller


            Oral
         Agreement
                            Designated Agency   Buyer OR Seller




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     Relationships

      Single agency
      Dual agency
      Designated agency
      Transaction broker/facilitator
      Finder



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     Single Agency
        Exclusive agent of the buyer or seller

        All of broker’s salespeople are also
         agents of the buyer or seller




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      Dual Agency
      Requires disclosure and informed consent
      Inherent conflict between full disclosure
       and confidentiality
      Not permitted in some states
         –   Colorado
         –   Kansas
         –   Florida
         –   New Mexico defaults to transaction facilitator

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     Designated Agency
      State specific
      Removes agency responsibility from
       other agents in firm
      Broker may/may not be a dual agent
      Assigned agents must not share
       confidential information


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     Non Agency Relationships

    Transaction Broker
     – VERY state specific – may not apply in
        your state
     – Acts as an intermediary
     – Not an agency relationship
     – Reasonable care and accounting
    Finder

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     Office Policy

        Know and comply with your broker’s
         policy on types of relationships
         offered and accepted

        No policy = undisclosed dual agency!


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     Skill Builder Tip: Creating an Agency
     Policy
      1.  Present a brief opening statement of agency policy.
      2. Describe how the policy will be implemented.
      3. Define the types of agency relationships practiced.
      4. Include a rationale for the company’s agency policy.
      5. Explain how the consumer is treated in each relationship.
      6. Indicate what disclosures must be made.
      7. Indicate when and to whom disclosures must be made.
      8. Include standard forms licensees are required to use.
      9. Specify training the company will provide to licensees.
      10. Attorney review for policy for conformance with state laws.
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     Building Blocks

        What are your broker’s office policies
         regarding:
         – Types of relationships offered and
           accepted?
         – How does the buyer benefit?
         – How are designated agency or dual
           agency situations handled?

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