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WHAT SINGLE AGENCY MEANS TO YOU AS MY CLIENT
Single Agency real estate practice means that as a licensee
I represent only one party in a transaction. The transaction may be a
sale, lease or exchange and may involve residential real estate, investment
properties, business opportunities, long-term leases, loan brokerage,
trust deed investments, or land. Only in a single agency context, can
I negotiate for the best possible price and terms for my client. In addition,
my duty as a real estate agent includes full disclosure of all material
facts concerning the property, facts which have an important bearing on
the value or use of the property.
Single Agency applies to different parties & transactions. Here is
how I practice Single Agency regarding:
SELLERS
As a listing agent, I inform the seller that probably I will not sell
the property myself. Rather, I will market it so other licensees working
with buyers will most likely procure a sale. I will presume that the other
licensee represents the buyer, whether or not the seller pays both fees.
While the eventual elimination of splitting seller fees among brokers
is desirable, it is not yet a widespread practice.
If I am approached directly by a buyer, I will recommend that the buyer
seek independent real estate representation. The buyer does not have to
pay a brokerage commission to purchase the property. Competent brokers
who work on an hourly rate or flat fee basis may represent him in this
transaction. To improve understanding, in addition to my state mandated
agency disclosure regulations, I will provide the buyer/customer with
a copy of the brochure, Representation Alternatives, and with the Single
Agency Disclosure Statement from Who's Who In Creative Real Estate, both
of which explain in plain language the difference between client and customer
status. In brief, a client employs me as his agent. A customer does not
employ an agent and so is not entitled to the benefits of client representation.
If a customer reads the brochure and makes the decision not to hire independent
representation but to represent himself, the transaction can continue.
My file, containing the signed Single Agency Disclosure Statement, will
document the customer's decision.
If a purchase or sales contract is drawn, I will note in that agreement
that the buyer/ customer declined representation. Legally a client is
represented by a real estate firm, not just one member of the firm. Single
Agency requires the same procedures detailed above apply if the buyer
approaches another licensee in the same firm, other than the listing agent.
BUYERS
When a buyer contacts me, I will provide the buyer with a copy of the
brochure, Representation Alternatives, and with the Single Agency Disclosure
statement from Who's Who In Creative Real Estate, both of which explain
in plain language the difference between client and customer status. Should
the buyer choose client status, I will negotiate my fee with the client.
An Employment Agreement for the purpose of locating real property will
describe the terms and conditions of my employment. The entire marketplace,
not just listed properties, are now open to my buyer/client.
BUSINESS
OPPORTUNITIES
The procedure described for sellers and buyers applies.
CONFLICTING
INTERESTS
A conflict can arise if a seller and a buyer are both represented by us,
and the buyer desires to purchase the seller's property. for example,
one agent in our office might enter into a listing agreement with a property
owner, and a second agent in our office might enter into an exclusive
employment agreement with another person (A Buyer) to find a property
for that person. After both agreements are signed, the agents might realize
that the property which has been listed is a suitable property for the
person who signed the exclusive employment agreement to locate a property.
In such circumstances, we will terminate the last agency created to avoid
acting as a dual agent in the transaction. In other words, our office
will represent only the first person who employed us as an agent. We will
not participate in a DUAL AGENCY transaction! In our listing agreements
with sellers and exclusive employment agreements with buyers, we will
obtain their written consent, in advance, to cancellation of the last
agency created if a conflict arises.
EXCHANGES
When a property owner requests me to represent him/her in an exchange,
and we decide to work together, we will sign an Employment Agreement.
The Agreement will state that I represent only my client and will be paid
only by my client. I will not pool or split fees with agent(s) representing
other parties in the transaction.
LOAN
BROKERAGE
If a borrower employs me to find financing, then I become the agent of
that borrower and will try to get the best loan available for that borrower.
TRUST
DEED AND MORTGAGE INVESTMENTS
If I place money for an investor either in new loan(s) or in seller carryback
trust deeds/mortgages, I will be the agent of either the note seller or
the investor, but not both. If I sell notes in which I have an ownership
interest, I will be a principal and not the agent of the investor. My
disclosures will be made at our initial contact.
FOR
SALE OR LEASE BY OWNER
When I am employed as an agent by a buyer/lessee client to contact an
owner/lessor, I will suggest that the owner engage independent legal,
tax, and brokerage representation. Competent brokers who work on an hourly
or flat fee basis will provide guidance and/or client level representation
in the transaction. If the owner chooses to represent himself, I will
document that fact, using the Single Agency Disclosure Document, and continue
the transaction. If a lease contract is made between the owner and my
client, I will note in that document that I advised the owner to seek
independent representation, but that he chose to represent himself.
PERSONAL
ESTATE BUILDING
People who have established a client status with me are eliminated from
those to whom I will either sell something from my personal holdings or
will buy something of theirs. Sufficient opportunities exist in the marketplace
for me to build my estate while preserving my integrity as an agent.
I may buy properties using one of the following procedures:
FSBO
(FOR SALE BY OWNER)
I may approach FSBOs, identifying myself as a licensed real estate agent
who wants to purchase their property for my personal account with the
intention of making a profit. I will suggest that the seller seek legal,
tax, and brokerage counsel. That does not mean the seller must list his
property with a real estate agent. Competent brokers who work on an hourly
rate or flat fee basis may give the owner transaction guidance and/or
representation. If the owner chooses to represent himself, I will document
that fact in the purchase contract.
PROPERTY
LISTED BY OTHER LICENSEES
I may approach listing agents and identify myself as a license acting
as a principal with the intention of making a profit. I will disclaim
any agency relationship or interest in the listing agreement and will
not share in any brokerage fee paid by the seller.
BUYER'S
BROKER
I may employ the services of another agent to represent me in the purchase
of real property for my own account. The agent will disclose that I am
a licensee purchasing for my personal account with the intention of making
a profit. My agent and I will reject any interest in listing agreements
of other agents and neither of us will share in any fees paid by sellers.
SELLING
MY OWN REAL ESTATE
If I do not list my property with a broker, then I will advise prospective
buyers that I am a licensee selling my property for profit and will recommend
that they obtain legal, tax and brokerage representation.
AFFIRMATION OF SINGLE AGENCY
I BELIEVE THE PUBLIC IS BEST SERVED BY SINGLE AGENCY REPRESENTATION.
I AGREE TO PRACTICE REAL ESTATE IN THE SPIRIT AS WELL AS THE LETTER OF
THIS STATEMENT.
MY PLEDGE TO YOU,_____________________________, AS MY
CLIENT:
(client's name)
BUYING OR SELLING FOR MY OWN ACCOUNT
Any attempt by me to sell you a property owned by me or for me to purchase
your property for my personal investment portfolio (legitimate home trade-in
programs excepted) constitutes a similar breach of my Single Agency commitment.
Dated___________ by_____________________________________________
signature of agent & countersigned by principal broker
© April 1991, Who's Who in Creative Real Estate,
Inc.
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