EXPLANATION OF BROKERAGE RELATIONSHIPS

Real estate licensees in Virginia are required by law to make prompt written disclosure of any brokerage relationship to members of the public who are unrepresented.

Licensees must also make written disclosures to obtain timely consents from their clients before entering into other brokerage relationships.

THE LICENSEES DUTIES
  • A licensee must have a written brokerage agreement to represent a client and a licensee owes his client certain duties.
  • A licensee who is not representing you in a transaction can nonetheless provide you other valuable information and assistance.
  • You should always keep in mind whom the licensee represents in your transaction, and thus to whom that licensee owes the duties described below. 


WHOM DOES THE LICENSEE REPRESENT?


In any real estate transaction, a licensee may represent the seller, the buyer, or, under certain circumstances, both the seller and buyer.

The person the broker and broker’s agents represent is referred to as the “client” and the other party is referred to as the “customer.”  A real estate licensee or agent has a contractual agreement to act as the “agent” of the client. An Agent owes certain duties of confidentiality, ordinary care, accounting and disclosure to the client. Nonetheless, even if an Agent is contractually the agent of another party to a real estate transaction, the Agent can still provide you with a variety of valuable information and assistance.

THE SELLER

A licensee represents a seller via a written brokerage agreement called a Listing Agreement. The licensee owes his primary responsibilities to the seller. The licensee must disclose his relationship with the seller whenever dealing with an unrepresented buyer. The licensee is also allowed to assist an unrepresented buyer with ministerial duties, such as filling in the blanks of a contract and holding the escrow deposit.

THE BUYER

A licensee represents a buyer via a written brokerage agreement called a Buyer Representation Contract. The licensee agrees to represent the interests of the buyer. The licensee must disclose his relationship with the buyer whenever dealing with an unrepresented seller. The licensee may perform ministerial duties for an unrepresented seller, such as delivering offers and counteroffers.

THE BUYER AND THE SELLER

A licensee and his firm may represent both the buyer and the seller in a particular transaction, but only with the inform- ed written consent of both the buyer and the seller. The licensee representing both the buyer and the seller in a dual capacity is necessarily limited in his ability to represent either the buyer or the seller fully and exclusively. The licensee must safeguard the confidentiality of any information obtained within the confidentiality and trust of the brokerage relationship, unless disclosure of such information is required by law. Specifically, the licensee must not tell the buyer that the seller will accept a price lower than the listing price, nor tell the seller that the buyer will pay a price higher than the price offered.

DESIGNATED LICENSEES

Virginia law also permits a principal or supervising broker to designate different licensees affiliated with the broker to represent different clients in the same transaction. Designated agency / representation requires informed written consent from both parties. Unlike the dual relationship discussed in the previous paragraph, these designated licensees represent only the interest of their respective clients, and may therefore represent those interests fully. The principal or supervising broker who is supervising the transaction will be considered dual broker of both the seller and buyer. Designated licensees may not disclose, except to their broker, personal or financial information received from the clients during the brokerage relationship and any other information a client requests to keep confidential, unless required by law to be disclosed or the client consents to the disclosure in writing.

SELLER REPRESENTATION

A licensee may represent a seller under a listing agreement, in which case the licensee owes his primary responsibilities to the seller. The listing agreement may authorize the listing firm to list the property with a multiple listing service and to cooperate with other licensees. These cooperating licensees, who frequently work for other firms, may operate under an agreement of subagency with the listing firm, in which case they also owe their primary responsibilities to the seller.  Purchasers working with a licensee should be aware that the licensee may be a subagent of the listing firm and thus the representative of the seller.

PURCHASER REPRESENTATION

A licensee and a purchaser may enter into an agreement by which the licensee agrees to represent the interests of the purchaser. A purchaser’s representative must repudiate any subagency offered by a listing firm and must disclose his relationship with the purchaser whenever dealing with the seller or seller’s representative.

DUAL AGENCY PURCHASER AND SELLER REPRESENTATION

A licensee, either acting directly or through one or more of the real estate company’s other licensees, may be the representative of both the purchase and the seller in a particular transaction, but only with the informed written consent of both the purchaser and the seller. A licensee representing both the purchaser and seller will necessarily be limited in his ability to represent either purchaser or seller fully and exclusively. The licensee must safeguard the confidentiality of any information obtained with the confidentiality and trust of the brokerage relationship, unless disclosure of such information is required by law, or is authorized in writing by the client. Specifically, the licensee must not tell the purchaser that the seller will accept a price lower than the listing price, nor tell the seller that the purchaser will pay a price higher than the price offered.

DUAL AGENCY WITH DESIGNATED REPRESENTATIVES

Virginia law also permits a principal or supervising broker to assign different licensees affiliated with the broker as designated  representatives to represent different clients in the same transaction. Unlike the dual representative discussed in the previous paragraph, these designated representatives represent only the interests of their respective clients,  and may therefore represent those interests more fully. The principal or supervising broker who is supervising the transaction will be  considered a dual representative of both seller and Purchaser. Designated representatives may not disclose, except to their broker, personal or financial information received from the clients during the brokerage relationship and any other information a client request be kept confidential, unless required by law to be disclosed or the client consents to its disclosure in writing.

CLIENT RESPONSIBILITIES

Representation by a licensee in a real estate transaction does not relieve sellers and purchasers from the fundamental responsibility to protect their own interests. A purchaser should take all reasonable steps to determine the condition of the property the Purchaser is purchasing, and all parties should carefully read all agreements to assure that they adequately express their understanding of the transaction.  A real estate licensee is qualified to advise about real estate, but if you need legal or tax advice, you should consult a competent professional.

A client should ensure that any existing brokerage relationship is disclosed to all other clients and their representatives. A purchaser should also consult the purchaser’s representative before visiting any resale or new homes or contacting any other licensees to avoid the possibility of the violation of existing brokerage relationships.
Myra Spano REALTOR® - Serving all of Virginia Beach, Chesapeake, Norfolk, Suffolk, Portsmouth, Hampton, Newport News - Call/text 757-563-3110