What All Buyers Need to Know
What do I need to l know about buying or selling a house in Pa.?
The Consumer Notice - explains Agency Relationships. It is not a contract.
Pennsylvania Law requires real estate brokers and salespersons (licensees) to advise consumers (buyers or sellers of real estate) of the types of business relationships permitted by the Real Estate Licensing and Registration Act. This notice must be provided to the consumer at the first contact where substantive discussion about real estate occurs.
A real estate licensee/agent is required to disclose how they represent a buyer and seller in any real estate transaction. Before a prospective client/customer, discloses any confidential information to a real estate agent (licensee) regarding a real estate transaction, you should understand what type of business or agency relationships are available to you with that agent (licensee). By doing this you now become knowledgeable enough to give an informed consent as to the type of agency relationship you desire. Unless you select an agency relationship by signing a written agreement providing for such a relationship, the licensee is not representing you. A business relationship of any kind will not be presumed.
Prudential Fox & Roach practices the following types of Agency.
In this form of agency a Broker/Licensee will play one of two roles. They are either a seller's agent or a buyer's agent.
Seller agency is a relationship where the licensee, or listing agent/broker, upon entering into a written agreement, works only for a seller.
Buyer Agency is a relationship where the licensee, or buyer's agent/broker, upon entering into a written agreement, works only for the buyer, even if the seller pays a portion or all of the commission.
Dual Agency is the most confusing and least understood form of agency. In this form of representation, the Broker/Licensee represents both the seller and buyer equally. Dual agency is most likely to occur when a licensee with a real estate firm working as a buyer's agent, shows the buyer property(s) owned by sellers for whom that same firm is also working as a seller's listing agent. To work as a dual agent, a firm must first obtain the informed written consent of the buyer and the seller
(Disclosed Dual Agency/Designated Agency). A real estate licensee working as a disclosed dual agent must explain to each party that, in addition to working as their agent, their firm will also work as the agent for the other party. Designated Agency allows individual licensees to maintain their exclusive status of representation with a seller and buyer, even when both parties are represented by the same Broker.
In the event a single licensee represents both the seller and the buyer in a transaction, the Licensee will act as a dual agent as described above. Written consent of the parties is required for this change to occur.
Buyer Agency Contract
As a buyer wishing to be represented by a buyer's agent, you must enter into a separate written buyer agency agreement, an "Exclusive Buyer Agency Contract". It should be noted that the standard practice in the area is for the seller to pay a commission which compensates the buyer's agent.
The following are negotiable and shall be addressed in the exclusive buyer agency contract with the licensee:
• The duration of the employment contract
• The fees or commissions
• The scope of the activities or practices
• The broker's cooperation with other brokers, including the sharing of fees