 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
MANDATORY AGENCY DISCLOSURE - AGENCY
RELATIONSHIP
The purpose of this disclosure is to enable
you to make informed choices before working with a real estate licensee. It must be
provided at the first personal meeting that you have with an agent to discuss a specific
property. THIS IS NOT A CONTRACT. It is a disclosure notice for your
information and protection. BE SURE TO READ THE DESCRIPTIONS OF THE DIFFERENT TYPES
OF AGENCY REPRESENTATION ON THE OTHER SIDE OF THIS DISCLOSURE.
CONSUMER
INFORMATION
1) Whether you are the buyer or the seller
you can choose to have the advice, assistance and representation of your own
agent. Do not assume that a broker is acting on your behalf unless you have
contracted with that broker to represent you.
2) All real estate licensees
must, by law, present properties honestly and accurately.
3) If you are a seller you may authorize
your listing agent to cooperate with agents from other firms to help sell your
property. These cooperating agents may be subagents who work for the seller or
buyers' agents.
4) If you are the buyer you have the
option of working with sellers' or buyers' agents. This decision will depend on the
types of services you want from a real estate agent. A buyer should tell sellers'
agents, including subagents, only what he/she would tell the seller directly.
CONSUMER RESPONSIBILITY
The duties of a real estate licensee do not
relieve the consumer of the responsibility to protect his/her own interest.
Consumers with questions on whether and how real estate agents share fees should pose them
to the agent. If you need advice for legal, tax, insurance or other matters it is
your responsibility to consult a professional in those areas.
(REVERSE SIDE OF DISCLOSURE FORM - AGENCY RELATIONSHIPS...)
TYPES OF AGENCY
REPRESENTATION:
SELLER'S AGENT
When a seller engages in the services of a
listing broker, that seller becomes the broker's client. This means the broker, and
his/her subagents represent the seller. they owe the seller undivided loyalty, utmost
care, disclosure, obedience to lawful instruction, confidentiality and accountability.
They must put the seller's interest first and negotiate for the best price and terms for
their client, the seller. (the seller may also authorize subagents to represent him/her in
marketing the property to buyers).
BUYER'S AGENT
When a buyer engages in the services of a
broker then that broker becomes the broker's client. The broker owes the buyer undivided
loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and
accountability. They must put the buyer's interest first and negotiate for the best price
and terms for their client, the buyer. (The buyer may also authorize subagents to
represent him/her in locating property).
DISCLOSED DUAL AGENT
A broker can work for both the buyer and the
seller on the same property provided the broker obtains the informed consent of both
parties. The broker is then considered a disclosed dual agent. This broker owes the seller
and the buyer a duty to deal with them fairly and honestly. In this type of agency
relationship the broker does not represent either the seller of buyer exclusively and they
cannot expect the broker's undivided loyalty. Also, undisclosed dual agency is illegal.
ACKNOWLEDGEMENT
I have provided this disclosure form to _______________________
(print name of consumer)
I will be assisting the above named
consumer as a:
(check one) __ Seller's Agent __
Buyer's Agent
________________________________
_______ ___ __ 19___
(Signature of Real Estate
Agent)
(License Number) (Month) (Day) (Year)
I have read this agency disclosure form IN
ITS ENTIRETY ON BOTH SIDES.
I understand that this form is for agency disclosure AND NOT A CONTRACT.
It was provided to me by the agent named above.
_______________________________________ ____
____, 19 __
(Signature of
Consumer(s))
(Month) (Day) (Year)
Check Here: __ Buyer __ Seller
___ As a consumer I recognize that I
need not select any agency representation at this time.
Therefore, I decline to sign this disclosure. Any additional reason for declining to
sign:
_______________________________________________________________
(PRINT NAME OF CONSUMER AND REASON,
IF ANY) |
