Do Not Fail to Review Agency With All Sellers and Buyers
As a real estate agent licensed by the State of
Upon review of the
form, check the “Disclosure of Subagency” box if it
applies, and in any event, have the prospective buyer or seller sign the acknowledgement
on the tear-off panel of the brochure. If the prospect refuses to sign it,
document that fact on the panel. Keep
the tear-off panel in the transaction file for three years.
The primary goals
of this procedure are:
• to inform your seller or buyer of the available options for
an agency relationship and, through that disclosure, to choose the most
appropriate one;
• to prevent the communication of confidential information by
the seller or buyer to the agent before a specific agency relationship has been
established.
Working With Real Estate Agents may be purchased online at the
Commission’s website, www.ncrec.state.nc.us, or with
an order form that can be mailed with a check or faxed with credit card
information. The form may be printed from the website’s Publications page and
is also available in each issue of the Commission’s newsletter, the Real Estate
Bulletin.
You may substitute
use of the printed brochure and card with materials available on the
Commission’s website: a reproducible version that can be printed using legal
size (8 ½” x 14”) paper or text for both brochure and acknowledgement card that
can be copied and pasted into a word processing program.
To quickly
communicate content with a seller or buyer that resides elsewhere, you can
download a portable document file (pdf - for opening
with Acrobat Reader) and email it as an attachment. You can then review the
content with the client/customer so that an appropriate agency relationship may
be established.
There is a
substantial discussion of what is meant by “first substantial contact” in the
North Carolina Real Estate Manual, the textbook written and published by the
Real Estate Commission for required postlicensing
education. (The 2008-2009 edition of the Real Estate Manual has just been
published and may be ordered online at the Commission’s website.)
In brief, the term
is defined in the Manual as “the point in time when a customer, whether a
prospective seller or buyer, begins to act as though an agency relationship
exists…” or “…when the licensee begins to speak or act in such a way that a
reasonable buyer or seller would believe that an agency relationship exists.”
“First substantial
contact” commonly (but not exclusively) occurs with sellers in a pre-listing
meeting, with buyers in a meeting to define the parameters of a home search,
and with owners marketing their own property (FSBO’s)
when approached by an agent for a buyer interested in the FSBO property.
Disclosure should be made during or prior to these occasions, in order to avoid
the possibility of obtaining confidential information before the prospect has
been advised of the available agency relationships, and their consequences.
Agents can easily
review with sellers the agency relationship options described in Working With Real Estate Agents at the time of listing. If the agent
lists a property using the North Carolina Association of REALTORS® Form 101
(Listing Agreement) Paragraph 7 concerning Agency Relationships states that the
seller has received and reviewed a copy of the brochure, and requires the
seller to authorize either “dual agency” (subject to the terms of an attached
Dual Agency Addendum) or “exclusive representation at all times”.
Agents working
with buyers generally should review the Working With
Real Estate Agents brochure before entering into a written agency agreement, as
the first substantial contact is likely to occur very early in the relationship
between the buyer and agent. Following a general rule of “sooner is better than
later” is prudent.
Agents making an
inquiry for a buyer about FSBO property should begin their conversation with
the seller with a prompt review of the brochure so that the seller fully
understands the consequences of working with the buyer and his agent without
representation and/or entering into a fee agreement with the agent.