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AN AGENCY IS NOT JUST A COMPANY

AGENCY IS THE LEGAL DEFINITION OF REPRESENTATION IN THE REAL ESTATE PROFESSION - IT IS ALSO OVERUSED, UNDERRATED AND GENERALLY MISUNDERSTOOD.


WHEN SELECTING A REAL ESTATE AGENT, IT IS IMPORTANT TO HAVE SOME KNOWLEDGE ON THIS SUBJECT.

  • Real estate agents are licensed by the state in which they practice and, unless they hold a Broker's license, must work under the guidance of a licensed Broker who owns/runs the office, or agency.

  • Agency also refers to the relationship that the Broker and the real estate agent has with a Principal, or a person who requests their services. The Principal could be a buyer or a seller.

 

An agency relationship requires that the principal (client) contracts with the agent, which includes the broker’s entire company, to act on the client’s behalf by pledging 6 fiduciary duties to the principal.

Historically, agency has been around since Biblical times and was brought to this country through the Law of Agency from England. Its application in real estate started with a Seller Only model. Sellers were the only Principals as they would hire or ask someone to sell their property. The Seller's Agent would either find a buyer or an agent in their office would find a buyer. Many times listings were not shared while an agent waited to find a buyer and thus got referred to as "pocket listings". All agents worked for the seller. The buyer was a customer. The Principal, who was the Seller, was also the Client.

When Multiple Listing Service [MLS] came into being in the 70's, Seller's agents "offered" their listings to all MLS members and "shared compensation" to agents in other offices who brought "ready, willing and able" buyers. These "cooperating sub-agents" also worked for the Seller, because they worked with the buyer, but not for the buyer. The situation lead to misunderstanding by buyers and even some sellers who thought the agent bringing the buyer was working for the buyer!

Traditional Agency Model (us vs them)

It was determined in a study done by the Federal Trade Commission in the 80's that up to 86% of buyers and sellers thought the agent working with the buyer was the buyer's agent. This potential for misrepresentation was fertile ground upon which the buyer's agent emerged. This was a licensed agent who agreed to work for the buyer! The problem would seem to be solved. But because these agents still worked for an agency that represented Sellers, the agency, and sometimes the agent, found themselves offering representation to the seller and the buyer at the same time! Although legal if all parties agree to it, the "dual agency" situation means reduced services to both parties in the transaction. It was also highly illegal if the parties were not informed and the dual agency happened without notice. Some innovative brokers began to practice "exclusive buyer agency" to avoid the potential for conflict of interest. In this model the buyer was a client and the seller did not have a relationship with the buyer's agent.

Dual Agency Model (trust only goes so far)

The 90's saw buyer representation start to spread nationwide and several national franchises started for exclusive buyer agency offices only. One such franchise was Buyer's Resource out of Colorado and Hall-McGee Realtors, LLC became the 13th franchise known as Buyer's Resource of the Seacoast. States began to require disclosures about company agency relationships in order to protect consumers who were not aware that the agent they were working with might NOT be working for them! Both NH and Maine developed mandatory agency disclosures [NH Agency Disclosure] [Maine Agency Disclosure] which are required to be read and signed with any potential client. In this model, both the seller and buyer have their own agent.

 

The new century brought more changes. There was a great deal of consolidation as technological advances made access to the Internet easier for consumers and more expensive for agencies. Real estate companies got either very large or quite small. Exclusive buyer agencies tended to be smaller, but organized into associations. Locally the Massachusetts Association of Buyer Agents [MABA] formed in 1991 and in 1995 the NH Association of Exclusive Buyer Agents [NAEBA]. Many large real estate companies and franchises have sought local legislation to "legalize" dual agency in an effort to offer one stop shopping and protect their ability to receive the "double-dipper" commission (receiving money for representing both the buyer and the seller).
Today, it is easy to find a buyer's agent...not so easy to find a true exclusive buyer's agent. We have been a true exclusive buyer agency since 1990.

Exclusive Buyer Agency Model
 

STATE AGENCY DISCLOSURES

 

In order to inform and protect consumer home buyers, state agency disclosure forms were created by both NH and Maine Real Estate Commissions in the 1990's. The Commissions felt it was important that consumers understand the options available to them in working with real estate agents PRIOR to commencing a relationship with a real estate agent or company. You may click on the appropriate disclosure for the state where your primary search will take place. Please note that neither of these disclosures commits you to any relationship or obligation to do business with Buyer's Brokers of the Seacoast. They are presented here for disclosure and compliance purposes only.

If you wish to sign-up for our services you may obtain initial counseling services by contacting our office 603-436-6636 info@buyeragents4u.com or by contacting one of our agents.


[NH Agency Disclosure Form] PDF file
[Maine Agency Disclosure Form] PDF file

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Buyer's Brokers of the Seacoast | Jim Albert Real Estate LLC | NH #047097 ME #DB916851

Downtown Office

36 Maplewood Avenue Portsmouth, NH 03801

Contact

(603) 436-6636

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