Demystifying Agency Relationships As They Relate To Buying Or Selling
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Demystifying Agency Relationships As They Relate To Buying Or Selling Real Estate In Bc
Wouldnt you like to learn and understand agency relationships that you may form as look to buy or sell real estate in BC? What is a Realtors obligation to you and how does it change with a differing agency relationship.
What is agency?
Agency is a legal relationship between you the principal and your brokerage the company your Realtor is licensed under. An agency relationship gives that brokerage the authority to represent you in your dealings with others.
What are the different types of agency relationships?
There exist three types of agency relationships:
Agency
Dual Agency
No Agency
Agency
When an agency relationship exists between you and a brokerage the brokerage owes you the following duties:
* The brokerage is obligated to disclose all known facts that may influence your decision and is obligated to protect your negotiating position at all times.
* The brokerage must obey all lawful instructions from you.
* The brokerage must keep your confidences for example the brokerage may not disclose a sellers motivation to sell; or a buyers motivation to buy to anyone.
* The brokerage must perform all of its assigned duties with reasonable care and competence.
* The brokerage must account for all monies or properties held for its principal.
In an agency relationship the brokerage only represents the principal no one else.
Dual Agency
When a brokerage represents both the seller and the buyer in real estate transaction there exists dual agency. The brokerage owes the duty of confidentiality loyalty and full disclosure to both parties. As such it must limit these duties if both parties agree in writing. The brokerage will deal with both the seller and the buyer impartially.
* It owes a duty of disclosure to both parties except that:
the brokerage will not disclose what the buyer is willing to pay for the property or what the seller is willing to accept for the property;
the brokerage will not disclose either parties motivation to buy the property or sell the property;
the brokerage will not disclose either parties personal information unless consent is received in writing.
* The brokerage will disclose to the buyer any known effects about the conditions of the subject property.
No Agency
In this type of relationship you are not represented by a Realtor for example if you call the listing Realtor directly. The listing Realtor has an agency relationship with the seller and you may choose to deal with them under a No Agency relationship. The Realtor has an obligation to provide you with honest and accurate answers to your questions; however the Realtor is NOT your agent and cannot:
* Recommend or suggest an offer or price
* Disclose the price the seller is willing to accept
* Disclose any other confidential information unless it has been authorized by the seller.
Clearly the ideal situation is to be represented by a Realtor under an Agency Relationship or at the very least under a Dual Agency Relationship. A real estate transaction is going to be your largest financial investment wouldnt you wanted to be properly represented by a professional?
About the writer: Sapan Behar is a Real Estate Agent based in Langley British Columbia. He specializes in residential real estate in Langley and Surrey. Sapan is associated with Royal LePage Wolstencroft Realty Ltd. a full service real estate brokerage located in Langley BC. He is a very techsavvy Realtor and runs http://www.bcfarmandhome.com the most advanced real estate website in the Fraser Valley.
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