Saturday, February 9, 2008

First Time Home Buyers Should Know About Agency Types

This is Part Five in my series on Columbia SC real estate agency laws.

In Part One, I expressed the importance of discussing agency relationships with real estate licensees (agents) and agreeing on your business relationship.

In Part Two, I wrote about the difference between being a Customer and a Client.

Part Three discussed the importance of some sellers and all home buyers becoming Clients.

Part Four stated my fiduciary duties to you as a real estate consumer.

This installment will discuss three types of Agency Relationships in South Carolina and how they impact you during the real estate sales process.

First, Let's discuss Single Agency. When a real estate Company and its associate licensee represents only one client in the same transaction (the seller or the buyer), the relationship between the Company and the seller/buyer is called Single Agency. Approximately 93% of my clients have entered into a Single Agency relationship with me. After reading the remaining portions of this post, you will understand the importance of that statement in reaching your real estate goals.

Let's turn our attention to the second type of agency.

Designated Agency came on the South Carolina real estate scene on January 1, 2005. In designated agency, a broker-in-charge (which is the personification of a real estate Company) may designate an individual associated licensee to act solely on behalf of each client. These designated agents have a duty to promote the best interest of their clients, including negotiating a price.

The broker-in-charge remains a disclosed dual agent (which will be address shortly) for both clients, and ensures the assigned agents fulfill their duties to their respective clients.

At the time you sign an agency agreement, you may be asked to acknowledge whether you would consider giving written consent allowing the Company to designate a representative for you and one for the other client in a designated agency.

For example....If I am representing you on the purchase of a home that is listed by my office colleague Lisa Davey, Lisa and I would be designated agents in that transaction and our broker-in-charge Margaret-Ann Ashburn would be a disclosed dual agent.

Disclosed Dual Agency exists when the real estate Company has two clients in one transaction – a seller client and a buyer client. At the time you sign an agency agreement, you may be asked to acknowledge whether you would consider giving written consent allowing the Company to represent both you and the other client in a disclosed dual agency relationship.

In a disclosed dual agency, the Company's representation duties are limited because a buyer and seller have recognized conflicts of interest. Both clients' interests are represented by the Company.

If I became a disclosed dual agent in any real estate transaction, I could not advocate on behalf of one client over the other, and cannot disclose confidential client information concerning the price negotiations, terms or factors motivating the buyer/client to buy or the seller/client to sell.

Hence....about 93% of my clients enter into Single or Desigated Agency agreement with me. It is important for my clients to have an advocate throughout the entire real estate sales process that is committed to your best interests.

In the final installment of this series, we'll discuss what to expect in an agency agreement.

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