
Before you begin working with an agent it is important to
understand that Massachusetts Law provides for different types of representation and Broker/Agent relationships (or
agency) for both buyers and sellers. At your first personal meeting to discuss a specific property or properties,
real estate agents (brokers and sales representatives) must give you a Massachusetts Mandatory Licensee-Consumer
Relationship Disclosure (Agency Disclosure) Form. The purpose of this form is to disclose the agent's relationship
with you or any other party to the transaction (buyer or seller). This form is not a contract. The form also
includes an explanation of the different types of agency relationships (real estate representation) such as:
Definition of Agency
"Agency" means a fiduciary relationship between a principal or client and an agent arising out of a brokerage
agreement whereby the agent is engaged to do certain acts on behalf of the principal or client in dealings with a
third party.
The Professionals
- Real Estate Agent:
- A person who has been issued a license to sell real estate in Massachusetts
- Broker (principal broker):
- The owner or manager of a real estate company or company branch office. The agent in charge of the other
real estate agents or sales associates and everything that happens in the real estate office or branch office.
Real estate brokers are issued a separate license by Massachusetts and have more training than real estate
sales agents and sales associates.
- REALTOR:
- A member of the leading trade organization for real estate agents, the National Association of REALTORS
(NAR), The Massachusetts Association or REALTORS (MAR) and The North East Association of REALTORS (NEAR).
Duties
A licensee or real estate agent who provides services through a brokerage agreement for a seller, landlord,
buyer, or tenant is bound by the duties of:
| Loyalty: |
Put her/his client's interests above the agent's own interests. |
| Obedience: |
Obey all lawful instructions of her/his client. |
| Accounting: |
Duty to protect all money given or documents signed. |
| Reasonable Care: |
Use her/his skill and expertise to the benefit of her/his client. |
| Disclosure: |
Must disclose all pertinent facts relating to the transaction. |
| Confidentiality: |
Must keep private information confidential. |
Seller's Agent
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).
Buyer's Agent
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).
Sub-Agency
When an agent who brings a buyer for another company's listing, the buyer's representative is in effect working
on behalf of the listing agent and the seller, owing them fiduciary duties equal to the seller agent. Sub-Agency is
just about dead most everywhere now, as it wasn't good for the buyers and made brokers and sellers vicariously
liable for the actions or errors of the buyer's representative.
Facilitator
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 accountability, provided, however, that the agent must disclose known material
defects in the real estate. The agent must put their client's interests first and negotiate for the best price and
terms for their client. In situations where the appointing agent designates another agent to represent the seller
and an agent to represent the buyer then the appointing agent becomes a dual agent. 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. The dual agent does not represent either the buyer or the seller solely only
your designated agent represents your interests. The written consent for designated 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 designated agency consent is available at the Board's website at
www.mass.gov/dpl/re.
Dual Agent
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.
Before you share information with an agent about your needs, motivation, time line or financial concerns, be
sure you understand whether or not that agent is working only in your best interests. This information may
affect your bargaining position when negotiating a transaction.
For more information regarding Real Estate Agents and Brokers please visit:
MA Board of Registration of Real Estate Brokers and Sales-persons
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