Understanding
Maryland's Required Agency Disclosure
At
your first meeting with an
agent, you will need to discuss representation. All agents in Maryland
are required to provide buyers and sellers with a Disclosure form,
which shows the different ways buyers and sellers can be represented.
With a seller, when they list their property with a real estate company,
it is pretty clear that their agent is representing them. With buyers,
there are several common scenarios.
In
most cases, if a buyer is working with an agent, they will eventually
be fully represented. For this to occur, the buyers must sign an agreement
with the real estate company to be represented. If the buyers have
not signed an agreement, the agent may not assist in any negotiations.
The
first way that an agent can work is through seller agency. Under seller
agency, the agent's obligation is to look out for the best interests
of the seller, even if they are working with the buyer. This means
that any information provided by the buyer that may affect negotiations
must be passed on to the sellers. The buyer should not have an expectation
of confidentiality. This can still be true, even if the house shown
or sold is listed with another company. In this case the agent is
known as a cooperating agent.
Another
option for buyers is some form of buyer agency. In Maryland, this
can take a couple of different forms. When a buyer first meets with
an agent, the agent is presumed to be representing the buyer, and
is referred to as a presumed buyer's agent. An agent may not work
in this capacity for houses listed with his or her own company. The
agent must still provide the agency disclosure and explain it to the
buyer. The agent also may not assist in any negotiations as a presumed
buyer's agent. The main benefit to the buyer is that the agent must
keep confidential anything they learn that may affect negotiations.
A
buyer may also enter to a written agreement to be represented by the
agent. Once under a written agreement, the buyer has the full benefits
of buyer agency. The agent is obligated to look out for the buyer's
best interest, assist in any negotiations, and can help a buyer write
an offer on a property.
If
the agent and buyer are working under any form of buyer agency, and
the buyer wants to see a property listed with the agent's own company,
the buyer must agree to dual agency. This is done both on the agency
disclosure and a separate "Consent For Dual Agency" form.
If the buyer does not sign the consent for dual agency, the agent
will be considered a sellers agent while showing that property. The
seller must also agree to the dual agency for their house to be shown
to a buyer that is being represented by that same company.
In
a dual agency situation, the buyers and sellers may still be fully
represented. Only the broker (the top person) for the company is considered
the dual agent. The salespeople in this situation would be referred
to as intra-company agents and can still negotiate and look out for
their clients' best interest.
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©2011
Douglas R. Barry
