Get Real about Property! Travels through Real Estate Law by Tom Brodersen, Esq.
It used to be that listing agents always represented Sellers, in the fullest legal sense. The problem was, under the structure of most Multiple Listing Systems (MLS), the cooperating agent, who drives Buyers around in his or her car all day (maybe even buying them lunch to win their loyalty, or beers at the end of the day) also represented the Seller (under what was called a sub-agency agreement, which was triggered by an agent showing properties listed in the MLS).
The Buyers often didn’t understand that. It is true that some agents executed special agreements to be Buyers agents exclusively, but that wasn’t typically the case.
In recent years, Florida law has changed and all agents are presumed to be what is called “transaction brokers,” unless the paperwork clearly says differently. Transaction brokers (or agents) don’t truly represent anyone and as some would (inartfully) say, they “represent the deal.” What does that mean? Do they really only represent themselves? It’s a fair question.
The truth is, there is a list of seven specific duties, all of which add up to full representation, but in the case of a transaction broker, three of those duties are reduced or eliminated. They are confidentiality (for example, does the agent tell the Seller that the Buyer could afford or is willing to pay more for the property than is being offered, if necessary), disclosure (everyone is entitled to full disclosure as to property condition and value, but not necessarily information about the parties bargaining position), and loyalty.
I don’t think this framework is a good idea, because agents charge the same, but give the public less as transaction brokers. And just try to explain to people that you can’t give them your undivided loyalty. It’s a real hard sell. However, that’s up to brokers and their business strategy, and, in all fairness, this all doesn’t really add up to much practical difference to Buyers and Sellers, in most cases.
Sometimes, however, it counts for a lot. When one party has little or no experience with buying and selling real estate, they need more help, maybe a lot more help. They should be fully represented, but they need to ask for it very clearly, or they probably won’t get it.
If you don’t feel up to reading (and able to understand) every line of every document put in front of you, you should probably talk to a real estate lawyer.
Next month we’ll talk about a recent horror story caused by exactly these considerations.
Anderson & Brodersen, P.A. 727.363.6100, www.propertylawgroup.com