Buyers Agency, Segment 2- buyer Agency in Practice Flashcards

Buyers Agency, Segment 2- buyer Agency in Practice Flashcards Single Agency/Dual Agency MixBrokerages emphasizes single agency, but permits dual agency if dual agency is legal in the state. In situations where dual agency arises (the buyer is purchasing a property listed by the brokerage) these brokerages reason that it is better for both the seller and buyer to allow the dual agency to exist.Types of Transactions Agency Disclosure Form is RequiredAny sale/exchange of single family 1-4 units residential property.Any sale/exchange of multi-unit residential property with more than four dwelling unitsAny Commercial real propertyAny vacant landAny ground lease coupled with improvementsA mobile or manufactured home when sold by a real estate licensee (dwelling is permanently attached to land)(As of January 2019, AD form required for vacant land sales and residential property containing 5 or more units.) Dual AgencyRepresenting both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states California Agency Disclosure Requirements Effective January 1, 1988, the California Legislature, through Civil Code Section 2079.14, requires the listing and buyer's agents in residential property transactions to provide both the seller and the buyer with written and oral disclosures relating to agency issues.Oral disclosures as required by California Civil Code Section 2079.17 As soon as practical,1) the buyer's agent shall disclose to the buyer and seller whether the agent is acting in the real property transaction as the buyers' agent, or as a dual agent representing both the buyer and the seller.2) The seller's agent shall disclose to the seller whether the seller's agent is acting in the real property transaction as the seller's agent, or as a dual agent representing both the buyer and seller.AD :The basic requirements of Civil Code Section 2079.141) The listing/seller's agent must deliver to the seller prior to the time the listing is signed seller by the seller Disclosure regarding Real Estate Agency2) the buyer's agent must deliver to the buyer a Disclosure regarding Real Estate Agency3) Agents must orally inform the buyer and seller whether they are acting exclusively as agents of the buyer, exclusively as agent of the seller, or representing both seller and buyer as dual agent.4) In the contract for purchase and sale of real property, the agents must confirm in writing the agency relationships involved in the

transaction. the purpose of the confirmation is for all parties is the transaction to acknowledge whom the various agents represent.Seller Agency OnlyA seller agency only brokerage represents only sellers and never represents a buyer.NAR Policy Regarding Agency Representation InquiryNAR amended their Code of Ethics by adding a requirement that before a licensee may provide substantive services to a prospective seller or buyer, the licensee shall ask the prospect whether they are a party to any exclusive service agreement. The code further requires all communications with client must be through the agent and not directly with the client, except if the client and the agent

consent.Dual Agency ImplicationsThe licensee cannot give either party the full range of fiduciary duties ordinarily due to the principal by the agent.The licensee must disclose the implications of acting for both parties.Both the seller and buyer should understand that reliance of the licensee is limited and that they must make their own decisions.During the

presentation process, the licensee should advise the seller and buyer that they may and should obtain independent inspections and property evaluations, and counsel.Buyer Agency OnlyIn a buyer agency only firm, the brokerage will only represent buyers.Undisclosed Dual Agencyis illegal, a violation of real estate law and will likely subject a licensee to disciplinary action by the DRE and civil action either by Seller or Buyer.