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Why Do We Need Mandatory Agency Disclosure in Massachusetts? Each year home buyers and sellers use the services of real estate agents who are compensated for their services in commissions. Although the agents provide valuable services, research shows that most consumers understand very little about whom their agents actually represent. The Federal Trade Commission (FTC) conducted a study and released findings which confirmed how widespread the confusion is among home buyers and sellers. State by state, regulators have looked at this consumer education problem and promulgated regulations and agency disclosure forms to help consumers understand their options. In 1993, the Massachusetts Board of Registration of Real Estate Brokers and Salespersons adopted an updated acknowledgement form with the purpose of enabling consumers to make informed choices before working with a real estate licensee. The form must be provided at the first personal meeting that you have with an agent to discuss a specific property. This form gives you the opportunity to interview the real estate agents to find out who they will represent, how they will get paid for their work, and if they have any conflicts of interest (e.g., listings for which they previously agreed to work for the sellers). Keep in mind that until you know who the agents work for, it is in your best interest to keep your financial information and motivation for buying or selling confidential. A sample of the MASSACHUSETTS BOARD OF REGISTRATION OF REAL ESTATE BROKERS AND SALESPERSON - MANDATORY AGENCY DISCLOSURE - AGENCY RELATIONSHIP form appears below. All real estate licensees you meet with to discuss properties should be discussing this form with you and explaining your choices. Have You Seen This Form? MASSACHUSETTS BOARD OF REGISTRATION OF REAL ESTATE BROKERS AND SALESPERSONS MASSACHUSETTS MANDATORY LICENSEE - CONSUMER RELATIONSHIP DISCLOSURE This
disclosure is provided to you, the consumer, by the real estate agent
listed on this form. Make sure you read both sides of this form.
The reverse side contains a more detailed description of the different
types of relationships available to you. This is not a contract.
THE
TIME WHEN THE LICENSEE MUST PROVIDE THIS NOTICE TO THE CONSUMER: All
real estate licensees must present this form to you at the first
personal meeting with you to discuss a specific property. The licensee
can represent
you as the seller (Seller's Agent) or represent you as the buyer
(Buyer's Agent) and also can assist you as a facilitator. CONSUMER
INFORMATION AND RESPONSIBILITY: Whether
you are the buyer or seller you can choose to have the advice,
assistance and representation of your own agent who works for you.
Do not assume that a real estate agent works solely for you unless
you have an agreement for that relationship. With your consent,
licensees from the same firm may represent a buyer and seller in the
same transaction. These agents are referred to as dual agents. Also,
a buyer and seller may be represented by agents in the same real
estate firm as designated agents. The "designated seller or buyer
agent" is your sole representative. However, where both
the seller and buyer provide written consent to have a designated
agent represent them then the agent making such designation becomes a
"dual agent" for the buyer and seller. All real estate
agents must, by law, present properties honestly and accurately. They
must also disclose known material defects in the real estate. The duties of a real estate agent do not relieve the consumers of the responsibility to protect their own interests. If you need advice for legal, tax, insurance or land survey matters it is your responsibility to consult a professional in those areas. Real Estate agents do not have a duty to perform home, lead paint or insect inspections nor do they perform septic system, wetlands or environmental evaluation. RELATIONSHIP OF REAL ESTATE LICENSEE WITH THE CONSUMER (check
one) _____Seller's agent
____Buyer's Agent
____Facilitator IF
A SELLER'S OR BUYER'S AGENT IS CHECKED ABOVE COMPLETE THE SECTION
BELOW: (Check
one) ___The real estate agent listed below, the real estate
firm or business listed above and all other affiliated agents have the
same relationship with the consumer named herein (seller or buyer
agency, not designated
agency).
____Only the real estate agent listed below represents the
consumer named in this form (designated By
signing below I, the real estate licensee, acknowledge that this
disclosure has been provided timely to the consumer named herein. ________________________
________________________
_________________ _____________ (Signature of real estate agent) (Printed
name of real estate agent)
(License
Number/Type)
(Today's Date) By
signing below I, the consumer, acknowledge that I have received and
read the information in this disclosure. _____________________________ ______________________________ ___________________ (Signature of consumer) (Printed name of consumer) (Today's Date)
_____________________________ ______________________________ ___________________ (Signature of consumer) (Printed name of consumer) (Today's Date) ____ Check here if the consumer declines to sign this notice.
(REVERSE SIDE OF DISCLOSURE FORM - AGENCY RELATIONSHIPS) A seller can engage the services of a real estate agent to sell his property (called the listing agent) and the real estate agent is then the agent for the seller who becomes the agent's client. This means that the real estate agent represents the seller. The agent owes the seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put the seller's interests first and negotiate for the best price and terms for their client, the seller. (The seller may authorize sub-agents to represent him/her in marketing its property to buyers, however the seller should be aware that wrongful action by the real estate agent or sub-agents may subject the seller to legal liability for those wrongful actions). A buyer can engage the services of a real estate agent to purchase property and the real estate agent is then the agent for the buyer who becomes the agent's client. This means that the real estate agent represents the buyer. The agent owes the buyer undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put the buyer's interests first and negotiate for the best price and terms for their client, the buyer. (The buyer may also authorize sub-agents to represent him/her in purchasing property, however the buyer should be aware that wrongful action by the real estate agent or sub-agents may subject the buyer to legal liability for those wrongful actions) When a real estate agent works as a facilitator that agent assists the seller and buyer in reaching an agreement but does not represent either the seller or buyer in the transaction. The facilitator and the broker with whom the facilitator is affiliated owe the seller and buyer a duty to present each property honestly and accurately by disclosing known material defects about the property and owe a duty to account for funds. Unless otherwise agreed, the facilitator has no duty to keep information received from a seller or buyer confidential. The role of facilitator applies only to the seller and buyer in the particular property transaction involving the seller and buyer. Should the seller and buyer expressly agree a facilitator relationship can be changed to become an exclusive agency relationship with either the seller or the buyer. DESIGNATED SELLER'S AND BUYER'S AGENT A
real estate agent can be designated by another real estate agent (the
appointing or designating agent) to represent either the buyer or seller,
provided the buyer or seller expressly agrees to such designation. The
real estate agent once so designated is then the agent for either the
buyer or seller who becomes their client. The designated agent owes the
buyer or seller undivided loyalty, reasonable care, disclosure, obedience
to lawful instruction, confidentiality and A
real estate agent may act as a dual agent representing both the seller and
buyer in a transaction but only with the express and informed consent of
both the seller and buyer. Written consent to dual agency must be obtained
by the real estate agent prior to the execution of an offer to purchase a
specific property. A dual agent shall be neutral with regard to any
conflicting interest of the seller and buyer. Consequently a dual agent
cannot satisfy fully the duties of loyalty, full disclosure, obedience to
lawful instructions which is required of an exclusive seller or buyer
agent. A dual agent does, however, still owe a duty of confidentiality of
material information and accounting for funds. The written consent for
dual agency must contain the information provided for in the regulations
of the Massachusetts Board of Registration of Real Estate Brokers and
Salespeople (Board). A sample dual agency consent is available at the
Board's website at www.mass.gov/dpl/re. agency disclosure-exclusive agency5.doc |
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