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What is BUYER REPRESENTATION in a real estate transaction?
In every real estate transaction the agent with whom the consumer is working is representing someone called his client or his principal. The Client/Principal may be the buyer or it may be the seller. If you are a buyer, you need to know if the agent with whom you are working represents you or the seller. Do you assume because you have an agent showing you property and giving you information that that agent represents you? That may not be the case. Agency Relationships are best discussed prior to looking at any properties. At the initial meeting between the real estate agent and the consumer, the agent should provide the South Carolina Agency Disclosure form. This form required by the state, outlines the choices of the consumer. If the consumer wants to self- represent, he/she is called a customer. That choice requires the agent to treat them honestly and to assist them in learning about all of the material aspects of a property. In this case, the SELLER is the client. IF the consumer wants to be a client then a BUYER CLIENT contract is agreed upon. This is an Exclusive Representation Agreement. The Buyer pledges loyalty to the Agent and the Agent pledges loyalty to the consumer. A professional has this discussion with you at the first substantive meeting. Annette Martino has been teaching THE LAWS OF AGENCY for the SC REAL ESTATE COMMISSION since 1994. REAL ESTATE IN SOUTH CAROLINA and BUYER REPRESENTATION or, When to Use Duct Tape in a Real Estate Transaction The real estate agent in South Carolina can represent the buyer, the seller or both the buyer and the seller. In every transaction in South Carolina, the agent represents someone. Are You A Buyer Customer? If the agent represents the seller and you are a buyer; you may choose to be a customer. If you choose to be a customer, you are in effect, representing yourself. In this scenario, you would not want to share confidential information with the seller's agent because that seller's agent would be obliged to share it with the seller. Here is where YOU may need the duct tape. If the agent represents you as a buyer, the agent would keep your confidences and when asked questions of a confidential nature by the seller's agent about you, the AGENT may need to self-apply the duct tape. Are You A Buyer Client? If you are a buyer client and ultimately decide to buy a listing from the company for whom your agent works, you would be in a situation where that agent represented both the buyer and the seller. In this eventuality, both the seller client and the buyer client would have to agree to this relationship prior to the negotiation of a contract of sale. They would be required to give their informed consent in writing. In this case both the AGENT representing the buyer and the AGENT representing the seller would be required to keep confidential information confidential. Keep the Duct Tape handy. Annette Martino has been teaching THE LAWS OF AGENCY for the SC Real Estate Commission since 1994. What is a REALTOR? What you need to know about ethics, professional standards and duties. In the next series of articles, I will discuss the role of the REALTOR with respect to legal obligations, ethics, professional standards and duties. These articles can help you understand the legal and ethical obligations of the REALTOR and also give you valuable information so that you can ask the right questions when deciding with whom you would like to work. Today's topic offers a definition of a REALTOR and the legal and ethical landscape in which they perform their services. What is a REALTOR? All individuals who hold a South Carolina Real Estate License are not REALTORS. REALTOR is a designation of professionalism and denotes that the agent is a member of their local professional association the South Carolina Association of Realtors (SCAR) and the National Association of Realtors (NAR). Membership in these 3 organizations requires that the agent embrace and follow the National Association of Realtors Code of Ethics. The NAR code of ethics The NAR CODE OF ETHICS is composed of an aspirational Preamble and of 17 Articles. It is based on The Golden Rule and though it was originally written in 1913, it is a living, changing document. Each year the National Association of Realtors publishes The Code in the January issue of its monthly magazine to members. At this time, any changes that NAR has made are reported and explained. Every 4 years each REALTOR must take an approved ETHICS course. Failure to comply results in expulsion from the association. The ARTICLES comprising THE CODE OF ETHICS are divided into 3 groups: Duties to Clients and Customers, Duties to the Public and Duties to other REALTORS Under each Article are Standards of Practice designed to explain, support and interpret the Articles. Code Enforcement There is a Code Enforcement process. When licensees decide to become REALTORS, they embrace the ethical behavior required by membership and they agree to file a Grievance if need be and to present themselves appropriately if a Grievance is filed against them. Each local association has a GRIEVANCE COMMITTEE which functions like a grand jury and a PROFESSIONAL STANDARDS COMMITTEE which will hear a case sent to them by the GRIEVANCE COMMITTEE. An ethical complaint may be filed by a member of the public. In my next article, I will walk you through the REALTOR'S Duties to Clients and Customers as covered in the NAR Code of Ethics. Annette Martino teaches the NAR QUADRENNIAL ETHICS COURSE, has taught ETHICS for the South Carolina Real Estate Commission for 8 years and has served many years on the Grievance Committee and the Professional Standards Committee for the HILTON HEAD AREA ASSOCIATION OF REALTORS. She is also a Director for the South Carolina Association of Realtors. |