Orlando Real Estate, Orlando Buyers Agent, Orlando Homes, Orlando Buyers Broker: What you don't know about "Agency Relationships"...

What you don't know about "Agency Relationships"...

 

After reading comments that licensed agents make, it is easy to conclude that most have no clue about "Agency Relationships". 

 

Understanding agent duties and boundaries does not need to be elusive.

                                                                                                    

Here are some basics:

 

1.  Agency relationships are not created by a simple phone call.  They are also not created just because you show a house or someone walks into your open house.  It is also not an automatic "agency relationship" just because you show a buyer 20 homes or have a pocket listing. 

 

2.  Agency relationships are established in writing (yes, it could be verbal...cough cough) The written agreement spells out the time frame for the relationship and the duties of  both the agent and consumer. What are you going to do for them? What are they going to do in return?

 

3.  An Exclusive listing agreements with a seller is no different than a Exclusive listing agreement with a buyer and carries equal weight. Only a written exclusive agreement makes the consumer "your" client. 

 

4.  Buyers and sellers are free game for anyone to solicit unless you have an "exclusive right to represent" contract with with them as in #2.

 

5.  Having 2 clients (buyer and seller) in the same transaction is a conflict of interest regardless of how it is spinned or camouflaged.

 

6.  Without an "listing agreement" or an "exclusive buyer agreement", the consumer is only a "customer", not a "client".  There are different duties attached to both.

 

7.  "Customers" get no fiduciary duties, "clients" get full fiduciary duties of loyalty, confidentiality and full disclosure

 

8. If you have a "client" it is your duty to take care of them, and fulfill your agreement.  If you listed with a seller, you promised to sell the property.  If you listed the buyer, you promised to find them a property. Just do it.

 

9.  The core value of an Agency relationship is universal just like the code of ethics, it does not vary from state to state. 

 

10.  Your feelings, emotions and what you think does not count, as it is your duty to put the clients best interest above your own.

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Representing ONLY the best interest of the Home Buyer...never the seller.

 Eve Alexander Orlando Buyers Agent

 

Comment balloon 65 commentsMike & Eve Alexander • November 12 2014 03:45AM

Comments

This is a great post about the real estate agency relationship.  Many want to grab that consumer / customer and claim them as a "client" -- but they have no idea what that the client needs to be in agreement too!  Just because someone signs up on our sites for a automated list of listing, or is assigned to us in a drip marketing campaign, they may not know they are considered a "client" . . . might want to check with the buyers on that 

Posted by Carla Muss-Jacobs, Principal Broker (503) 810-7192, Buyer Focused ~ Buyer Results (BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time) over 2 years ago

You sound like a Real Estate Instructor!

Andy Brown
www.ClimerRealEstateSchool.com

Posted by Andy Brown-Climer School of Real Estate, The Best Real Estate School in Florida (Climer School of Real Estate) over 2 years ago

Carla:  Thank you for "getting it".

Andy:  Just an educated Exclusive Buyers Broker that understands "agency".  Feel free to ask me. 

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Hi mike and eve,

you  explain agency relationships in a way that is easy to understand.

 

Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Hallmark Realtors) over 2 years ago

Eve and Orlando, I love this post.  And I especially think that you are so on point with #5 on your list - and I don't care what the laws are in any jurisdiction that allow for dual agency - with one person "representing" both parties of the transaction.

Posted by Patricia Kennedy, For Your Home in the Capital (Evers & Company Real Estate, Inc.) over 2 years ago

Need to be a little careful that consumers think this is the same in every state. Here in Illinois showing homes is consider an agency function and buyers must be served notice of agency prior to that happening. The agency relationship can be created by action, it does not have to be in writing.

Posted by Corinne Guest, Managing Broker, The Choice of Professionals (Barrington Realty Company) over 2 years ago

Laws differ from state to state, so we have to be careful not to generalize on topics where the devil is in the details. 

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) over 2 years ago

Real estate & agency relationship varies too much state to state to paint it all with a broad brush, and asserting personal opinion as a "basic" lends to more consumer confusion.  And whether you're allowed to and SHOULD is a whole 'nother beast too.  I'd rather work by the Golden Rule than spend my time trying to poach another agent's customer.

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 www.LizTour.com) over 2 years ago

I agree with laws vary too much from state to state.  In fact, in Georgia there is no such thing as full fiduciary duty.  Each duty owed a client HAS to be in the contract, if it is not it cannot be expected.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) over 2 years ago

Things are extremely different state to state - agency state vs transactional brokerage state. Please be careful not to generalize.

Posted by Emmary Simpson, Serving Tucson AZ (Realty ONE Group Mountain Desert) over 2 years ago

Unfortunately a general statement about an agent's responsbilities doesn't work well.  Each state has their own requirements regarding our duties to buyers and sellers.

Posted by Cindy Jones, Pentagon, Fort Belvoir & Quantico Real Estate News (Integrity Real Estate Group) over 2 years ago

As with most things in this life, it's complicated. Life goes on and we go on with it.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 2 years ago

Cindy, you have great integrity! And you never give that up! Keep moving on and growing better at your job every day!

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 2 years ago

You make some good points.  It is up to each agent to know their local laws and what is expected.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 2 years ago

Agency Relationships are important. In fact, I give all prospects and customers the facts by discussing Information on Broker Services on my first face to face visit. Plus, I started including it in all email communications to potential sellers or buyers. Every state addresses agency differently.

Posted by Jerry Newman, Texas REALTOR, San Antonio Military Relocation (Brown Realty, 210-789-4216,www.JeremiahNewman.com) over 2 years ago

And then there is "unintended" agency that also is not in writing. Just took my Hawaii Continuing Education course pointing this out. It would be the same here in California. We need to be careful!

Posted by Hella M. Rothwell, Broker/Realtor®, Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea over 2 years ago

This a great reminder to refresh out knowledge and understanding of agency relationship.  Thanks.

Posted by Frank Castaldini, Realtor - Homes for Sale in San Francisco (Coldwell Banker ) over 2 years ago

Mike & Eve Alexander you have explained Buyer's Agency the way it truly is.  It needs to be in writing (lack of cough cough) and buyers need to know you give everything you have TO THEM.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) over 2 years ago

Yes in Massachusetts we must acknowledge via a state disclosure form as to which capacity we are operating in at the first showing of a property to a party.

Posted by MaryBeth Mills Muldowney, Massachusetts Broker Owner (TradeWinds Realty Group LLC) over 2 years ago

Mike and Eve, great post. I would like to clarify a few of the points. The first point is of course, that every state is different and has different agency laws. 

I would like to add to your point #3: In the state of Florida an exclusive listing agreement does NOT make the seller "your client" unless you state in that listing agreement that you are acting as a "single agent" and thus, create a fiduciary relationship. Most brokers in Florida, us included, choose to work as transaction brokers which creates a "customer relationship" not a "client relationship". In the state of Florida the law presumes that all agents are acting as transaction brokers so there is no longer the requirement to provide the written representation document unless that capacity is changed during the course of the transaction. 

The exclusive listing agreement can be one of: 

1. Transcation brokerage ( not fiduciary) and most E&O insurance companies want this choice as well as most brokers for obvious reasons. This representation requires honesty in all dealings. 

2. Single agency ( fiduciary) 

3. No brokerage relationship  ( this is just a mediary for the contract). 

Buyers agents also can choose one of these capacities to represent a buyer. 

And kindly and respectfully I disagree with your point #5:  We double end our listings often and that is totally permissable by the agency law in Florida. FREC has outlined how that is to play out.  We do not have dual agency in Florida but we do have transaction brokerage. When we represent both parties in a transaction, we must do so either in transaction brokerage capacity or non representation capacity. We choose transaction brokerage again in this situation as well. There is NO conflict of interest when you follow the terms laid out by FREC for transaction brokerage.   

Florida Statute 475.278:

b. (b) Presumption of transaction brokerage.It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer. ...

...

(2) TRANSACTION BROKER RELATIONSHIP.A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:....

Posted by Nestor & Katerina Gasset, Realtors, Wellington Florida Homes For Sale (International Properties and Investments LLC) over 2 years ago

Mike and Eve,

Agency relationships and all that entails is what makes working with a Realtor worth every cent they get in commissions. Make sure the client realizes all they are getting when working with a professional Realtor. They will be glad they did not try to sell fake it through their transaction and risk loosing out on the best outcome possible.

Posted by Les & Sarah Oswald, Broker, Realtor and Investor (Eastvale Team Realty & Property Mgmt) over 2 years ago

As others have already pointed out here, 'Agency' varies state to state. Be careful to heed the rules in YOUR state.

Posted by Jon Quist, Tucson's BUYERS ONLY Realtor since 1996 (REALTY EXECUTIVES TUCSON ELITE) over 2 years ago

Mike & Eve Alexander - all great points. However, for #5, which is a dual agency, I am not sure why it is a 'conflict of interest' where buying a home is a process of 'meeting the minds'!

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (eXp Realty) over 2 years ago

You are correct that many real estate professionals do not fully understand agency relationships. Agency does not require a written agreement, however in Texas you cannot enforce payment of a commission without a written agreement. A real estate professional however would still be bound by all the fiduciary responsibilities of an agency agreement. Wow, all the responsibilities without any of the protections of a written agreement. Doesn't weigh out real well on the risk vs reward scale.

Posted by Rick Snow - Selling El Paso TX, Cool Deals on Hot Real Estate in El Paso, Texas (EXIT West Realty) over 2 years ago

Thbaks for sharing!!!

Posted by Sham Reddy, CRS (H E R Realty, Dayton, OH) over 2 years ago

Wayne and Jean: Thank you.

Pat Kennedy:  A smart lady you are.

Corrine Guest: yes you are correct there is implied agency

Liz and Bill Spear: While state rules will vary with what choices are allowed the core value of agency stays the same, just like the code of ethics.

Tammy Langford:  In Georgia, you spell out the list of  fiduciary duties which can be all of them.

Emmary Simpson:  Yes, choices do vary from state to state...not the value.

Cindy Jones: Not a general statement, a specific blog on agency relationsips that is universal regardless of what state you are in.

Laura Cerrano:  Happy days...

Joan Whitebook: You are correct, most agents are not clear about  their own

state.

Jerry Newman: Sounds like you are doing it smart and correct.

Hella M. Rothwell: and I would say that most agents are not careful enough.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Frank Castaldini:  You are welcome.

Joan Cox:  Thank you for getting it.

Mary Beth Muldowney:  That is the way it should be...very clear.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Excellent explanation--I have found that many agents do an abysmal job of explaining agency and how it works to prospective clients.

Posted by Nina Hollander, Your Charlotte/Waxhaw/Fort Mill Area Realtor (RE/MAX Executive | Charlotte, NC) over 2 years ago

Very clear overview of how agency works in Florida!

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, 914-419-0270, kat@thehousekat.com) over 2 years ago

Nestor and Katarina Gasset:

1.  Yes, while choices for relationships will vary from state to state, the common law of agency does not change.

2.  I think you misread #3 I did not say that a listing agreement makes you a client, I said "only a written exlusive agreement makes the consumer "your" client.

You are correct on the listing agreement choices and I have no doubt that E and O companies prefer that you act as a transaction broker, because when there is no loyalty, no confidentiality and no full disclosure promised... what is there left to be sued for?

Transaction Brokerage replaced Dual Agency in Florida because it sound better. 

However they kept the word "represent" but changed the meaning:  "Represent" now means that the buyer or seller  is not responsible for the acts of the licenseee...it does not mean what it should mean... that there is actually an advocate.  Which is why they call them "licensees" instead of agents.

Regarding #5:  Just  because the state allows it does not make it a good thing.

If "partially" or "fully" representing two parties with opposing interests were possible there would only be one attorney in every courtroom.  That does not happen because the Bar Association understands that with "conflict of interest" there would not be due process.

Everyone deserves full representation.

Thank you for a well thought out response.

 

 

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Sarah and Les Oswald:  Well stated.  This industry works hard for their money as you well pointed out.

Jon Quist: While the CHOICES for agency choices vary from state to state, the common law of agency stays the same.  The rules for being a client or being a customer don't change.

Nina Hollander:  An accurate observation

Kat Palmoitti:  thank you, but this is not just for Florida

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Praful Thakker:  The seller wants the highest price, the buyer wants the lowest price...I could write a list.  Conflict of interest does not mean that anyone does anything wrong...just that fact that you have someone in the middle between two people with opposing interests makes it a "conflict  of interest".

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Rick Snow:  Wow, you sound sharp!  I like the mandatory written agreement.

Sham Reddy:  You are welcome.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Mike & Eve Alexander ... agency relationships they way you have described work the same way up here. What I find baffling is the number of Realtors that don't understand it. It's really not that complicated.

Posted by Richard Robibero, ABR, SRS, Selling Your Home as if it were My Own! (Panorama R.E. Limited) over 2 years ago

I can understand how the public gets confused, but there are a lot of agents that I believe slept through the license course part about agency.

Posted by Ron Barnes, "Most agents claim they're #1 - I THINK YOU'RE #1! (Associate Broker at Berkshire Hathaway Home Services Georgia Properties) over 2 years ago

State laws and industry standards do vary.  The cliche if it looks like a duck, quaks like a duck... applies.  If you look like an agent, talk like an agent, act like an agent, then regardless of the paperwork, you are an agent.  I think the legal community refers to this as implied agency.

Posted by Jim Joeriman, Helping Agents Reach New Heights (Coldwell Banker Riviera Realty, Inc) over 2 years ago

I have to agree that many agents and most consumers are unaware how it works or what it means. Each state though does have different rules regarding it, NH has a couple of differences. Every agent needs to be sat down and made to know this before they are allowed to speak with, post on or go out with any customer. 

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) over 2 years ago

Treating "customers" like "clients" can get you in trouble...need to know to whom your fiduciary duty is contracted in writing.

Posted by Raul Rodriguez, Looking out for the client's interest and not my p (Covenant Partners Realty) over 2 years ago

Good morning Eve, I read many of the comments but believe that Nestor and Katerina's comment # 20 explains Florida agency law the best.  Having worked as a REALTOR here in Florida and also in Virinia, I have seen both sides of the agency laws.  Florida is a non-agency state, that's the bottom line since all agents are presumed to be transaction brokers unless the buyer or seller has signed an agency agreement.

Posted by Sybil Campbell, REALTOR® ABR, SFR, SRES Williamsburg, Virginia (Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia) over 2 years ago

Richard Robibeno: You are right,  It is not complicated...a lot of it is common sense.

Ron Barnes: Sometime the instructors make it confusing.

Jim Joeriman: Good Point! most non-agents will try to make it sound like they are on the consumers side when the paper work says otherwise, but don't understand the difference.

Sybil Campbell: This blog is not about Florida at all...it is about agency relationships. Although Florida licensees start out as transaction brokers in non-agency relationsips there is a choice for full agency relationship. No state is a true "non-agency" state as they all allow agency relationships. Thank you for your comment.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Good tutorial for those in your state.  We should all write one of these as it applies to our state.  Great job.

Posted by Paula McDonald, Magnolia Realty ~ Granbury, TX 936-203-0279 (Magnolia Realty ~ Granbury) over 2 years ago

You statement number 5 is amazingly correct. Ethically, morally and a few views have consistently shown me that it crosses my line.

I am luck that it's only shown up 1 time in my career.

Posted by Michael Rasch, Michael Rasch 305-741-1819 (Florida Home Sales and Investments ) over 2 years ago

In most licensing jurisdictions, the majority of real estate licensees are licensed as "salespersons" under a Broker or Agent. Yet salespeople often refer to themselves as "agents". Because in most representation contracts the Agency Relationship is with the Brokerage / Agency, the public is confused about the role of the licensed salesperson.

A salesperson licensee represents the Brokerage / Agency.

Posted by Larry Estabrooks, 100% representation = undivided client loyalty (Independent Real Estate Agent) over 2 years ago

it does not vary from state to state

 

I respectfully disagree.  I found myself thinking "it doesn't work like that in California" as I read the commentary.

Posted by Raymond Denton (Resolute Federal Savings Bank) over 2 years ago

Paula McDonald:  Ouch! not only for Florida...

Michael Rasch: Spoken like someone who understands right from wrong.

Larry Estabrooks: The public is confused because the agents are confused.

Raymond Denton:  While agency choices will vary from state to state the common law of agency does not change.  The duties (or non duties) for customers and clients are the same for anyone with a real estate license including California. Just like Procuring cause or the code of ethics is the same for all states.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

While there are state definitions regarding agency relationship, there is nothing that precludes any member of NAR from their code of ethics and the fiduciary duty is clear on that subject.  

Posted by Carla Muss-Jacobs, Principal Broker (503) 810-7192, Buyer Focused ~ Buyer Results (BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time) over 2 years ago

It should be the first thing you explain to a buyer, especially if they are using a lender you're not working with.  Often times they will try to get a buyer's agent assigned onto the transaction and the client will disappear.  

Posted by Kevin Mackessy, Dedicated. Qualified. Local. (Blue Olive Properties, LLC) over 2 years ago

Nice post, with a good explanation of agents responsibilities.Always amazed how few agents actually explain their responsibilities to future potentail clients.

Posted by Nick & Trudy Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) over 2 years ago

Implied agency . . . okay, I'll bite.   Implied by whom??  (#36)

1.)  The listing agent at the Open House talking to a consumer/customer who enters?  The listing agent walks like an agent duck, talks like an agent and they are . . . agent ducks FOR THE SELLERS.  To act on behalf of the consumer/customer buyer WITHOUT full disclosure is the real estate agency relationship known as : UNDISCLOSED DUAL AGENT (in Oregon terms.)  So much for that, just ducky, implied agency. 

2.)  The buyer's agent who takes out clients and tours 20 properties with them?  Then the buyers make a purchase through the listing agent on another property that wasn't toured with the buyer's agent.  LOL  Try making the "implied agency" argument on that one for the co-op.  

3.)  The buyers who are unrepresented and call on each and every FOR SALE sign imaginable?  They think that talking with the listing agent about the property makes the listing agent "their" agent. Oh, and by the way, they happen to have TEN "implied agents" they're talking with simultaneously.  HA HA HA  

Posted by Carla Muss-Jacobs, Principal Broker (503) 810-7192, Buyer Focused ~ Buyer Results (BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time) over 2 years ago

    Hi, Mike and Eve.

    "Fair Game" Scenario:  

     A Buyer who has signed a Buyer Broker Agency Contract walks into a model home, or an Open House, and DOES NOT DECLARE that they have any Agency Agreement.

    That Builder's Rep, or that Sellers' Agent for the Open House, writes an offer for that Buyer, and said offer is accepted by the Seller. 

     That Buyer is now under contract with the Seller.  The Agent for the Seller (or transaction broker), or Builder's employee who wrote that offer is entitled to whatever commission is offered by the builder, or to the coop fee that is offered in the MLS.

     Where does that leave that Buyer's Broker? 

     The Agent or Rep who wrote the offer has not violated any law or agency agreement, since they had no knowledge of any such agreement.

     The Buyer's Broker can go after that Buyer for whatever compensation was stated in the Agency Agreement/Contract that they had with that Buyer, in Civil Court. 

    But the Buyer's Broker won't have any procuring cause or action against the Builder's Rep or Seller's Agent or Transaction Broker, who had no knowledge of any Buyer's Broker Agency Agreement/ Contract.

 

 

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Frederick Griffin, Exclusive Buyer's Broker) over 2 years ago

Great topic, thanks Mike & Eve Alexander! Guilty as charged. Have had only one or two buyer's agreement in over 13 years.  I suppose that all my buying "customers" became "clients" once I wrote the offers or at least once we closed? ;-)

BTW, in Washington State (after the Oregon model, I believe) agents are now called "brokers" and brokers/brokerages are now called "firms." The general public barely noticed the change ;-)

Posted by Gerhard Ade, Real Estate with Confidence (RSVP Real Estate) over 2 years ago

Scott Godzyk:  They sure should, but they don't.

Carla Muss-Jacobs:  Like always you understand agency and the tie to the code of ethics.  Unfortunately most agents have not read or understood the COE.

Kevin Mackessy:  Not fair for sure.

Nick & Trudy Vandekar: thank you

Gerard Ade:  Interesting about Washington...what next?

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

 

   (Response to Fred Griffin #50  and thanks for the brain teaser)

Hi, Mike and Eve

 

    "Fair Game" Scenario:  

 

     A Buyer who has signed a Buyer Broker Agency Contract walks into a model home, or an Open House, and DOES NOT DECLARE that they have any Agency Agreement.

RESPONSE: The buyer is not required to DECLARE anything, as consumers are not bound by the code of ethics.  IF the agent is licensed,( as most are)  it is their duty to make an effort to find out if that agent is under any exclusive contract.

 

    That Builder's Rep, or that Sellers' Agent for the Open House, writes an offer for that Buyer, and said offer is accepted by the Seller. 

 

     That Buyer is now under contract with the Seller.  The Agent for the Seller (or transaction broker), or Builder's employee who wrote that offer is entitled to whatever commission is offered by the builder, or to the coop fee that is offered in the MLS.

 

     Where does that leave that Buyer's Broker? 

RESPONSE: If the salesperson is an employee, more than likely you have no standing to do anything.  IF however the salesperson is a licensed real estate agent,than they have to play by the COE rules even if they are working for a builder.

You would then have cause for an ethics complaint for interference in an agency relationship. Or if the commission is big enough you could sue for tortuous interference in a contractual relationship.(causing you financial harm)

 

     The Agent or Rep who wrote the offer has not violated any law or agency agreement, since they had no knowledge of any such agreement.

RESPONSE:  If licensed, it is their duty to ask, just like every agent is required to find out if a seller is listed, before they try to do business with them.  That is in the COE.

 

     The Buyer's Broker can go after that Buyer for whatever compensation was stated in the Agency Agreement/Contract that they had with that Buyer, in Civil Court.

RESPONSE: You are correct.

 

    But the Buyer's Broker won't have any procuring cause or action against the Builder's Rep or Seller's Agent or Transaction Broker, who had no knowledge of any Contract.

 

 RESPONSE: Interference in you agency contract has no bearing on a PC claim unless it was malicious or intentional.  Also, according to Nar's PC manual, there has to be a "listing agent" in order to have a procuring cause claim.

  • I have had a buyer go to contract on new construction without me. Agent was licensed, I met with manager and got paid. 

 

  • I had another builder rep (unlicensed) tell my buyers that my exclusive agreement "meant nothing" and they would have to buy without me. It got ugly, but I sure did get paid.

 

When stuff like that happens agents need to speak up...brokers don't want to be dragged into an ethics hearing ( yes I would name the broker also, as they should train and supervise) and builders don't want bad press.

 

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Mike and Eve, thanks for your excellent response in #53.

  Oh, just one more... what if the Real Estate Agent who writes the Offer is not a member of NAR?   The COE doesn't come into play.   Then what?   

         

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Frederick Griffin, Exclusive Buyer's Broker) over 2 years ago

Fred Griffin #54:  This has been my experience:

While you do not need to be a member of NAR or FAR, if you do want MLS access you sign a contract agreeing to arbitrate and follow the COE so no one is really off the hook unless they do not use the MLS.

Otherwise, the only recourse is the courts and courts deal with the law, not ethics.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Great scenarios and answers to Fred's questions.  Tortious interference is  a viable option for real estate agent who are not members of NAR.  If I have a contract with a buyer, and they have not CANCELLED it, that buyer rep contract is in play.  If I am NOT allowed to perform my duties under that contract because a listing agent, builder's rep. et al., didn't ask my client whether there were being represented by an agent . . . and wrote up the offer, that defense won't get them off the hook.  The person with the license is the one who has the obligations, duties, liabilities.  My contract was interfered with and I could not perform my duties as a result.  

Posted by Carla Muss-Jacobs, Principal Broker (503) 810-7192, Buyer Focused ~ Buyer Results (BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time) over 2 years ago

Carla Muss-Jacobs:  Excellent and accurate comment, thank you.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Excellent explanation of agency relationships, I know many agents who never pursue official agency, and I think that's a mistake.  It would be nice if more consumers were away of this information as well.

Posted by John Meussner, #MortgageMadeEasy Costa Mesa, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,) over 2 years ago

Hi, Mike and Eve!  You can find this post on today's "Last Week's Favorites".

Posted by Patricia Kennedy, For Your Home in the Capital (Evers & Company Real Estate, Inc.) over 2 years ago

Bravo Mike and Eve! Well written and explained. Good for you for the feature!

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) over 2 years ago

#5 is the big one for me that I see abused too much.

Posted by Charlie Dresen, Steamboat Springs, CO e-Pro (Steamboat Sotheby's International Realty) over 2 years ago

You make it sound so simple.

Throw in a little bit of greed and it sure gets very wacky, most often the consumers being the ones that get hurt.

Posted by Claude Labbe, Realty for Your Busy Life (Real Living | At Home) over 2 years ago

Well deserved Feature, Mike & Eve.  Congrats!

Posted by Sharon Tara, New Hampshire Home Stager (Sharon Tara Transformations) over 2 years ago

I was looking for your current blogs. I hope all is going well for you.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) over 2 years ago

Mike & Eve Alexander Right out of our real estate books on almost all issues except your #5.  Dual agency is how real estate used to be before the advent of Buyer's agents.  I, quite often, double end sales and have never found it to be a conflict of interest. The rules are clear I have a fiduciary responsibility to my Seller, but with agreement on both sides I can easily inform and provide support for the Buyers at a very high level. Thanks for your efforts on getting all this down.

Posted by Larry Lawfer, "I listen for a living." It's all about you. (YourStories Realty Group) over 2 years ago

Participate