Wednesday, May 9, 2012

Who represents who in a real estate transaction?

Buyer beware, you need to understand who represents who in a real estate transaction. The laws have changed so much in Massachusetts that even the realtors have a hard time understanding the rules.

Types of Licensee/Consumer Relationships

    1. Seller Agency - Real estate agent represents seller on client basis and treats buyer as customer. Seller agent's duties to seller include "OLD CAR".
    2. Buyer Agency - Real estate agent represents buyer client in real estate transaction
    3. Dual Agency - a real estate agent who represents both the seller and buyer in the transaction is a disclosed dual agent with written informed consent of both the buyer and the seller. A Dual Agent has a duty of confidentiality and accounting to both parties. Undisclosed dual agency is illegal. Reasonable Care and Skill will apply in the real estate transaction.
    4. Facilitator- Also known as a Non-Agent or Transaction Broker/Salesperson. The Facilitator works to complete the transaction. Although bound by license law and MGL Ch. 93A, they do not have a fiduciary relationship with the seller or the buyer. They do not represent either party in the transaction. The Facilitator must disclose all known material defects that exist. Failure to do so could result in a Chapter 93A violation. Their duties consist of accounting and any other Facilitator duties undertaken. Facilitator's has no required duties to seller and/or buyer A Facilitator is obligated to fulfill all the duties of "A" ("Accountability") pursuant to the Massachusetts Real Estate License Law.
    5. Designated Agent- A real estate licensee who has been specifically appointed or designated by the broker with whom they are affiliated to individually represent a specific client (either a buyer or seller) when selling or buying real estate. The designated agent has full duties of agency ("OLD CAR") to the client while all other licensees of the firm the Designate Agent is associated with do not represent the buyer or seller and could very well represent the other party to the transaction.

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