AGENCY LAW CHANGES: WHAT DO THEY MEAN FOR YOU AND YOUR AGENTS?

BEFORE WE BEGIN Audience members will not have speaking capabilities on this call However, we encourage all attendees to submit questions through the question field on the Go To Meeting control panel There will be a Q&A portion at the end of the presentation All questions submitted through the Go To Meeting control panel are private; they cannot be seen by other audience members

WHAT WE’LL COVER the upcoming changes to the current agency law; a review of the standard disclosure forms and other supplemental forms that will be available later this month; an outline of resources that will be made available to brokers and agents to inform and help them adapt to the changes; a few FAQs we’ve already been hearing around the state; and a Q&A period for additional questions you may have

AGENCY Changes to Virginia agency law take effect July 1, In the coming months, VAR will provide a variety of resources to help you adapt to the revisions, including videos, webcasts, articles, new forms, and classes.

WHY THE CHANGE TO THE LAW? 1. INFORM THE CONSUMER. The law is to make sure consumers are fully informed about the real estate services they’ll receive and the nature of the relationship with the licensee. 2. MITIGATE REALTOR ® LIABILITY. The law is designed to protect licensees by making sure full disclosure is provided and the nature of brokerage relationship is reduced to writing. It’s to eliminate much of the consumer confusion that can come back and bite the licensee. 3. DISCOURAGE OPPORTUNISITIC DUAL AGENCY. The law is intended to make sure that licensees who practice dual agency are fully informing consumers about the risky nature of that relationship.

AGENCY LAW CHANGES All licensees must have written brokerage agreements with consumers they represent. These agreements must, at a minimum: Provide a list of services that the agent will provide; Provide a schedule of fees that will be associated with service, and when payable; and Provide a definite termination date. 1. GET IT IN WRITING

INDEPENDENT CONTRACTOR means a real estate licensee who: enters into a brokerage relationship based upon a brokerage agreement that specifically states that the licensee is acting as an independent contractor and not as an agent; has obligations agreed to by the parties in the brokerage agreement; is required to maintain client confidentiality; exercise ordinary care; account for a client’s money and property; disclose material facts to client regarding the property and/or the transaction, and disclose material adverse facts/defective drywall to prospective purchasers and tenants; treat all parties honestly; and disclose the brokerage relationship to all parties; but does not have any other duties of a standard agent under Sections through (marketing, negotiating, etc.)

Dual agents and representatives must provide enhanced disclosure of limitations on what dual agents can and cannot do for parties to a transaction. There are exceptions for situations where existing clients come together in a common transaction, and for independent contractors. 2. ENHANCED DISCLOSURES FOR DUAL AGENCY AGENCY LAW CHANGES

Licensees must take a three-hour course on the provisions of the agency statute and the changes made in the legislation. You may exempt yourself from this only if you agree in writing that you will not practice residential standard agency during your license term. 3. MANDATORY AGENCY COURSE AGENCY LAW CHANGES

AGENCY COURSE TIMING Agents must take a three-hour course on the provisions of the agency statute and the changes made in the legislation. This means that if your current license expires after July 1, 2012, you may take the three-hour agency course at any time, beginning right now. In fact, if your license expires in July 2012, you will need the course very quickly. However, if your license expires in February through June of 2012, you should wait to take the course until after you have renewed your license. You may take the course now, but you will need to take it again (for credit) in your next license cycle.

NEW AGENCY DISCLOSURE FORMS DISCLOSURE OF DUAL AGENCY OR REPRESENTATION – RESIDENTIAL DISCLOSURE OF DUAL AGENCY OR REPRESENTATION – COMMERCIAL DISCLOSURE OF BROKERAGE RELATIONSHIP FOR UNREPRESENTED PARTIES DISCLOSURE OF DESIGNATED AGENCY OR REPRESENTATION In addition to these new required forms, we’ve also created several additional resources to help you adapt to the changes: INDEPENDENT CONTRACTOR LISTING AGREEMENT EXCLUSIVE BUYER BROKER AGREEMENT (REDUCED IN SIZE) NON-EXCLUSIVE BUYER BROKER AGREEMENT (REDUCED IN SIZE) TWO CONSUMER INFORMATION PIECES: DISCLOSURE OF BROKERAGE RELATIONSHIP INFORMATION FORM CONSUMER INFORMATION REGARDING WRITTEN BUYER BROKER AGREEMENTS

DISCLOSURES OF DUAL AGENCY OR REPRESENTATION RESIDENTIAL 2 PAGES

DISCLOSURES OF DUAL AGENCY OR REPRESENTATION COMMERCIAL 1 PAGE

DISCLOSURE OF BROKERAGE RELATIONSHIP FOR UNREPRESENTED PARTIES 1 PAGE

DISCLOSURE OF DESIGNATED AGENCY OR REPRESENTATION 1 PAGE

INDEPENDENT CONTRACTOR AGREEMENT 5 PAGES

BUYER BROKER AGREEMENT AVAILABLE IN EXCLUSIVE & NON-EXCLUSIVE 2 PAGES

SHORT BUYER BROKER AGREEMENT NON-EXCLUSIVE ONLY 1 PAGE

YOUR REALTOR’S ROLE 2-PAGE PIECE DESIGNED TO OUTLINE 1. WHY CONSUMERS SHOULD USE A REALTOR ® 2. WHY A BROKERAGE AGREEMENT IS NECESSARY

RESOURCES FOR BROKERS & AGENTS WEBSITE MAGAZINE EDUCATION STANDARD FORMS COURSE CALENDAR VIDEOS HOTLINE Q&A WEBINARS

VAREALTOR.COM/ AGENCY

CLASS CALENDAR CURRENTLY SHOWS MORE THAN 120 AGENCY COURSE OFFERINGS ACROSS THE STATE

COMMONWEALTH MAGAZINE APRIL: AGENCY PRIMER JUNE: AGENCY CHANGE TUTORIAL

DO I HAVE TO HAVE A WRITTEN AGREEMENT TO SHOW SOMEONE A HOUSE THAT IS NOT MY LISTING? Yes. But… It doesn’t have to be exclusive It doesn’t have to be long-term It doesn’t have to be for compensation It doesn’t have to be an agency relationship

WHEN DO YOU NEED TO DISCLOSE YOUR BROKERAGE RELATIONSHIP? The big questions is : Is the consumer already represented? If no: “Substantive” discussion Specific property Actual prospect who is not your client and who is not represented by any other licensee

WHAT IS SUBSTANTIVE ? Pricing questions Motivation Repairs/property condition

QUESTIONS & ANSWERS