April 23rd, 2023 7:54 PM by Linda Holley
A total of 22,985 people read my blog the past 30 days. Thank you!
My book, Failure to Disclose - A Double-Edged Sword has now been launched and is available on Amazon, Books a Million, and Barnes and Noble. I'm sorry to say that the front and back covers are not yet posted on Amazon. The book is women's fiction genre about Chloe, a buyer, who purchased a new mountain property and thought her very nice real estate agent was representing her. He wasn't--he was looking out for the Seller. This Realtor didn't have any of his Buyers' best interests in mind--he just wanted to get the deals closed and run to the bank with his commission checks.
A few months later, Chloe almost lost her life in a tragic fire on the property caused by construction defects. All Buyers lost a lot of money when they invested in Chenoa Condominiums near Jackson Hole, WY. They weren't told the truth about Chenoa, a new condominium community, from the very beginning. The real estate brokerage and their agents broke the law.
If you buy and read Failure to Disclose, please don't forget to leave a review.
When real estate agents work with both the Sellers and Buyers, there can be problems. Representing both parties is actually illegal in most states. That practice is called Dual Agency. When we work with both parties, we can be accused of not treating both parties fairly and can be sued.
One of Sarasota's top producers and his large brokerage were recently sued because a Seller he was working with didn't have an opportunity to see all offers that came in before accepting one. The better offer, which had an escalation clause, wasn't EVEN presented to the Seller. His listing agent was accused of presenting an offer from another Buyer resulting in a lower purchase price. Since the agent was working both sides of the transaction he would, therefore, earn both sides of the commission. He has denied the allegations, but he earned more than $100K by working with both the Seller and the Buyer and cutting the other Realtor out of a commission. The Buyer with the rejected offer visited the Seller and told him what he would have paid for the home. This Buyer refers to the practice of real estate agents working both sides of a transaction a "widespread danger" in this industry and he may be correct.
National real estate laws protect consumers. Brokerage relationships (called "Agency") with Sellers and Buyers are important for all real estate professionals to understand. We are required to know about brokerage relationships before being licensed.
CONSUMERS! If you haven't signed a Single Agent agreement, your agent is not representing you! In Florida, you'll have to specify that you will work with the agent only as a Single Agent and not as a Transaction Broker. Single Agents provide full representation to their clients and there are 9 duties that they owe to their clients (see more info below).
A Transaction Broker does not represent you and they owe you 7 out of 9 of duties listed below for Single Agents--Loyalty and confidentiality are not on that list. If your agent is a Transaction Broker, they can't even refer to you a client because you're not; you're their customer. Transaction Brokers can't even say "my Buyer" or "my Seller" because that implies you are getting full representation.
If the brokerage has no relationship with the Seller or Buyer, then there are only 3 duties that they owe their customers.
However, in all three brokerage relationships, all agents' number one duty is honesty, above all. No real estate professional should be guilty of "Failure to Disclose" any information that could affect the material value of the home being sold. You'll see how this plays out in my book, Failure to Disclose.
If you would like more information about real estate in Sarasota or Manatee Counties in Florida, please call Linda Holley, Realtor, GRI, SRES, Fine Properties, 941-914-4914. My author website will be up and running shortly - LindaHolleyBooks.com.
See information below from Law Office of Sam J. Saad, III.
Linda Holley
***********
Client Question: Can a real estate sales associate transact business with a real estate sales associate working under the same broker if there is an established single agent relationship with the real estate sales associate’s brokerage?
Answer: There are two forms of representation available under a Broker license held by a real estate professional according to Florida law: the Single Agent and the Transaction Broker. These two relationships entitle the buyer or seller to different upheld duties by the real estate professional.
A Single Agent is defined by Florida Statutes Chapter 475, Part I as a broker who represents either the buyer or seller of real estate, but not both in the same transaction. It is the highest form, providing the most confidence to the customer that the Realtor represents only the customer’s interest.
The duties of a single agent that must be fully described and disclosed in writing to a buyer or seller in agreements for representation include the following:
Disclosure of these duties must be made before or during entrance into a listing/representation agreement, or before the showing of property.
A transaction broker is defined as a broker who provides limited 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.
In a real estate transaction using a transaction broker, the buyer or seller are not responsible for the acts of a licensee, and both parties give up their rights to the undivided loyalty of a licensee.
This kind of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller; providing however, that a licensee should never work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.
The duties of the transaction broker include the following:
Section 475.278(1)(b), Florida Statutes, presumes that a licensee is operating as a transaction broker, unless the customer and broker establish a single agent or no brokerage relationship, in writing.
A single agent relationship may be changed to a transaction broker relationship at any time during the relationship between an agent and principal, provided the agent first obtains the principal’s written consent to the change in relationship.
If a single agent relationship or a transaction broker relationship is not established, the licensee is known to have a no brokerage relationship and owes the following duties to the buyer or seller of real estate:
Written disclosure in relationship between broker and buyer or seller must be of the same size type or larger as other provisions of the document and must be conspicuous in its placement to advise customers of the duties of a licensee with a buyer or seller. These licensee disclosure requirements apply to the sale of all residential property.
Real estate disclosure requirements do not apply:
Pursuant to Florida Statutes Chapter 475, Part I, a real estate sales associate may not accept or give an offer from or to a real estate sales associate working under the same broker if the client has established a single agent relationship with that brokerage. If a sales associate working under the same broker desire to enter into negotiation with another sales associate in that brokerage, the sales associate acting as a single agent would first need to obtain written consent from their client in order to change their relationship to a transaction broker. Upon becoming a transaction broker, the two agents may then and only then enter into negotiation on the interested property.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.