There are many considerations when buying or selling a property and we want to help you through the process. Various agency options exist; it is important we both agree on our working relationship. With this information, we hope to inform you of the different types of Agency that exist before you begin the process of buying a property and to assist you in understanding how we can work for you or with you.

We are happy to answer any questions that may arise after reading this information.

The Commonwealth of Massachusetts has a very specific law of agency representation and disclosure to educate and protect the consumer in the home selling and buying process. The purpose of this law is to make sure that consumers clearly understand whether or not they are being represented in a real estate sale or purchase.

Definition of Agency

An agency relationship of representation is created by a mutual decision of the parties. The consumer delegates an agent to represent them, and the agent consents to that delegation. This creates a client/agent relationship. The fiduciary duties owed to the client being represented are: Undivided Loyalty, Lawful Obedience, Reasonable Care and Diligence, Full Disclosure, Confidentiality, and Accounting of Funds. An agent works with a customer and for a client.

Seller Agency Representation

When a seller hires an agent to list their property, that agent will have the seller complete and sign a state Mandatory Agency Disclosure form. This form clearly tells the seller client that the agent and the agent's entire company is representing them and owes them all of the fiduciary duties of an agency relationship.

When a seller is interviewing an agent or agents before choosing a listing agent, the agent(s) will disclose to the seller that upon making a hiring decision, only the agent and company hired will represent them. So until then, the seller should not share any personal information such as their urgency, motivation or financial situation with the agents being interviewed because this information will be protected in a confidential relationship only by the agent and company actually hired.

Buyer Agency Representation

State law dictates that the buyer must be told at the first meeting with an agent that they, the buyer, have a choice as to how they will work with the real estate agent. They can hire that agent by requesting that the agent work for and represent them. Upon mutual agreement to this relationship, the buyer becomes a client of the agent and the agent's company, and is entitled to full representation and all of the fiduciary duties of agency.

The other way a buyer and agent can work together is with the buyer remaining a customer, and the agent acting as an agent or sub agent to the seller. A buyer customer is not represented, but is entitled to complete honesty, full disclosure of material facts about the property, and fair dealing from the agent.

At this first meeting with the buyer, once the buyer makes a choice of which relationship they will select, the agent will complete the state Mandatory Agency Disclosure form, carefully explaining just how that relationship will work. They buyer will be given a copy of this form.

Dual Agency Representation

In the event that a seller and a buyer are both being represented in an agency relationship by the same company, the company is then in what is called a dual agency relationship.

The company cannot exclusively represent both clients in the same transaction without moderating the fiduciary duties of undivided loyalty, full disclosure, and confidentiality. A company that offers both seller representation and buyer representation must discuss this with the clients at the time of hiring, and gain the clients' consent if the situation actually does occur.

In this event, the individual agents will continue to exclusively represent, negotiate for, and advocate for their respective clients. They will not, however, disclose confidential personal information about their client(s) without the client's permission.

The Bottom Line

Buyer Representation is about commitment and confidentiality. You must formalize the relationship. We are highly trained professionals devoted to providing superior service 100% of the time.

Client - the principal in an agency relationship to whom the real estate Agent/Company owes all fiduciary duties. The real estate agent works FOR a Seller client or a Buyer client and owes them all of the fiduciary duties of the Agency.

Customer - the real estate agent works with a Customer in selling a Client's property in a fair and honest manner. However, a real estate agent can neither negotiate on behalf of the Customer nor make recommendations or give advice to a Customer that is contrary to the Client's best interest.

The above content was provided by the Coldwell Banker brochure on Agency.