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Information About Agency
Relationships
Before you disclose confidential
information to a real estate licensee regarding a real estate transaction
you should understand what type of agency relationship you have with that
licensee.
As of Jan 1, 1994 Michigan law requires real estate licensees who are
acting as agents of sellers or buyers of real property to advise potential
sellers or buyers with whom they work of the nature of their agency
relationship.
A broker or salesperson may function in any
of the following capacities:
- Represent seller as an authorized
seller's agent or subagent.
- Represent buyer as an authorized buyer's
agent or subagent.
- Represent both seller and buyer as a
disclosed dual agent authorized by both the seller and buyer.
- Act as a transaction coordinator - a
licensee who is not acting as an agent of either the seller or the
buyer, yet is providing services to complete a real estate transaction.
Seller's Agent
A seller's agent under a listing agreement with the seller acts solely on
behalf of the seller. A seller can authorize a seller's agent to work with
subagents, buyer's agents and/or transaction coordinators. A subagent of
the seller is one who has agreed to work with the listing agent, and who,
like the listing agent, acts solely on behalf of the seller. Seller's
agents and their subagents will disclose to the seller known information
about the buyer which may be used to the benefit of the seller.
The duties that a seller's agent and
subagent owes to the seller include:
- Promoting the best interest of the
seller.
- Fully disclosing to the seller all facts
that might affect or influence the seller's decision to accept an
offer to purchase.
- Keeping confidential the seller's
motivations for selling.
- Presenting all offers to the seller.
- Disclosing the identities of all buyers
and all information about the willingness of those buyers to complete
the sale or to offer a higher price.
Buyer's Agent
A buyer's agent, under a buyer's agency agreement with the buyer, acts
solely on behalf of the buyer. A subagent of the buyer is one who has
agreed to work with the buyer's agent and who, like the buyer's agent,
acts solely on behalf of the buyer. Buyer's agents and their subagents
will disclose to the buyer known information about the seller which may be
used to benefit the buyer.
The duties a buyer's agent and subagent owe
to the buyer include:
- Promoting the best interest of the
buyers.
- Fully disclosing to the buyer all facts
that might affect or influence the buyer's decision to tender an offer
to purchase.
- Keeping confidential the buyer's
motivations for buying.
- Presenting all offers on behalf of the
buyer.
- Disclosing to the buyer all information
about the willingness of the seller to complete the sale or to accept
a lower price.
Dual Agent
A real estate licensee can be the agent of both the seller and the buyer
in a transaction but only with the knowledge and informed consent, in
writing, of both the seller and the buyer.
In such a dual agency situation the
licensee will not be able to disclose all known information to either the
seller or the buyer. As a dual agent, the licensee will not be able to
provide the full range of fiduciary duties to the seller or the buyer.
The obligations of a dual agent are subject
to any specific provisions set forth in any agreement between the dual
agent, the seller and the buyer.
Transaction Coordinator
A transaction coordinator is a licensee who is not acting as an agent of
either the seller or the buyer, yet is providing services to complete a
real estate transaction.
The transaction coordinator is not an agent
for either party and therefore owes no fiduciary duty to either party. The
transactional coordinator is not the advocate of either party and
therefore has no obligation to negotiate for either party. The
responsibilities of the transaction coordinator typically include:
- Providing access to and the showing of
the property.
- Providing access to market information.
- Providing assistance in the preparation
of a buy and sell agreement which reflects the terms of the parties'
agreement.
- Presenting a buy and sell agreement and
any subsequent counter-offers.
- Assisting all parties in undertaking all
steps necessary to carry out the agreement, such as the execution of
documents, the obtaining of financing, the obtaining of inspections,
etc.
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