Presentation on theme: "C O A L I T I O N Corner Agency Disclosure Coalition Corner: Business training tools for HR staff, real estate licensees and other service professionals."— Presentation transcript:
C O A L I T I O N Corner Program Objectives This program supplements a monthly editorial feature in ERC’s Mobility magazine In this segment, users will learn: –What the responsibilities of an agent are –How to define several types of agency –What to disclose — and when to disclose it — in agency relationships –Ingredients for successful agency disclosure
C O A L I T I O N Corner Agency Disclosure Agency disclosure — defining who the real client is and revealing the relationship to all parties involved—can be a complicated process, particularly in a relocation transaction In the U.S., currently 36 states (including D.C.) have agency disclosure laws
C O A L I T I O N Corner Loyalty to the party represented — or the principal – by diligently avoiding conflicts of interest Obedience to all lawful instructions given by principal Disclosure of information such as facts affecting value, purchase offers, identity/willingness/ability of potential purchasers, and other details that might affect seller’s ability to obtain highest price/best terms (seller’s broker) or lowest price/best terms (buyer’s broker) Confidentiality of any information that may weaken bargaining position Duty of care and diligence to perform with the reasonable levels of skill, care and expertise expected of a professional Roles and Responsibilities of an Agent
C O A L I T I O N Corner Sample Types of Agency Defined Buyer – agent owes all responsibilities to buyer, and must act solely on behalf of buyer’s interests Designated – allows sellers and brokers to designate which agents within the same firm will work on their behalf. Not offered in all jurisdictions. Where allowable, it is critical to have policies in place to keep information confidential, so agents within the same firm will not breach duties to clients if acting on behalf of potential purchasers. Dual — an agent may represent both buyer and seller in a transaction, but generally only with written consent of both. Negotiations may be restricted. Dual agency is not allowed in all jurisdictions.
C O A L I T I O N Corner Sample Types of Agency Defined Seller — agent owes all responsibilities to seller, and must act solely on behalf of seller’s interests Sub — agent may be authorized by seller to either solicit help of other agents, or help the listing agent work toward goal of selling property. Agents represent seller’s interests. Sub agency is not allowed in all jurisdictions. Transactional — typically used by seasoned homebuyers or in commercial transactions. Not allowable in all jurisdictions. Where allowable, sole task is generally to help facilitate the sale. No duty of loyalty to either party, but a role to bring the parties together to “make the deal”. Continued…
C O A L I T I O N Corner What/When to Disclose? Proper agency disclosure establishes what consumers/transferees can expect and where an agent’s responsibilities lie Regardless of what state/local jurisdiction laws mandate, it is in everyone’s best interests if agency relationships are disclosed up front, and consumers know and understand their options right from the beginning
C O A L I T I O N Corner Key Ingredients Know state/jurisdiction laws and regulations and have a clear understanding of what relationships are offered in your firm Know your responsibilities, being able to define and explain your general duties when working in any agent capacity Know the rules, being familiar with the parameters that dictate how an agent should behave in dealing with consumers, regardless of type of agency obligations Know what to protect, respecting confidential information and knowing when it may be possible/acceptable to breach your confidentiality obligation Know what – and when – information needs to be in writing While every jurisdiction’s laws will vary, the following are some general tips to help comply with agency disclosure: