Massachusetts Real Estate and More

"I'll Take Agency Relationships for $200, Alex"

WEICHERT, REALTORS® - Synergy — Fri, 30 Mar 2012 07:46:29 -0700

Just When You Thought You Understood Agency Law, the Black and White Turns Grey

Answer: Unless you have a listing contract in place with a seller before your appointment, anything that they tell you can be used against them if your buyer client subsequently makes and offer to purchase the home and you are not the listing agent.

Da, Di, Da, Dum, Da, Di, Da. Da, Di, Da, Dum, Da, Di Di, Da Dum Dum...

Question: If I go on a listing appointment and I end up not getting the listing, am I obligated to fulfill the duty of confidentiality?

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This was an actual discussion of a "hypothetical" event during a recent discussion between the Chairs and Vice-Chairs of our Board's Professional Standards Committee and its General Counsel.

The answer may be surprising to many of us. But let me clarify a bit.

In Massachusetts, real estate licensees are required under the Commonwealth's Consumer Protection Statutes to inform a consumer, at the first meeting, whether they are an agent of the seller, the buyer, or a facilitator to a transaction. Technically, that's wrong. What the Mandatory Licensee Consumer Relationship Disclosure form actually is intended to do is to inform the consumer that if a contractual relationship is established, then the licensee will serve in an agency capacity of either a buyer's agent, a seller's agent, or a facilitator to the transaction (Forget Dual Agency for a moment - you are still a buyers agent to the buyer and a seller's agent to the seller, else you are not a dual agent.)

The bottom line is that unless your seller customer lists the home with you, you have no contractual relationship, no agency relationship and anything they tell you can and should be held against them if you are representing a buyer, in an agency capacity, or else you may be violating your fiduciary duty to that client.

How do you get out of this uncomfortable position? Well honesty, integrity and full disclosure and discussion with the consumer is often the best remedy.

Many real estate agents feel that once the consumer disclosure is signed, they have the right (entitlement) to be considered as the procuring cause for any transaction with this consumer. Unfortunately, this is not the case, and to make things more confusing, the existence or non-existence of this legally required form is not entirely relevant or may be considered by a hearing panel of your local professional standards committee for an ethics or procuring cause complaint against a REALTOR® member.

Inform the prospective listing customer that you may be obligated to disclose anything they tell you about listing the home to a buyer client if you do not become the listing agent. This is an excellent way to encourage prospective sellers to interview only one or two agents before listing their home.
Tell prospective buyer clients that you may have knowledge about a particular property because you were asked to meet with the sellers and have them sign an acknowledgment that you are refraining from providing information gained during the listing presentation to these buyer clients.
Provide, up-front, a written disclosure to both the listing customer and your buyer client's your firm's policy with regards to "confidential" information obtained directly or indirectly from parties prior to an agency relationship being consummated.

It is important to note that this was a discussion of a hypothetical situation and no formal recommendation or conclusion was drawn by the panelists, nor was legal advise ever provided. If you see yourself in a similar situation, discuss the matter with your broker, the firm's legal counsel or call the legal advise hotline for your local board or state association of REALTORS®

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Msa	Zestimate Accuracy	Homes on Zillow	Homes with Zestimates	Within 5% of Sale Price	Within 10% of Sale Price	Within 20% of Sale Price	Median Error
Atlanta, GA	3	2,229,215	2,013,956	32.4%	54.2%	73.7%	8.8%
Baltimore, MD	3	971,667	953,118	35.2%	57.5%	78.3%	7.9%
Boston, MA	4	1,444,468	1,379,813	38.0%	62.1%	80.2%	7.1%
Chicago, IL	2	3,527,633	3,145,576	31.2%	51.5%	71.7%	9.5%
Cincinnati, OH	1	730,914	663,259	--	--	--	--
Cleveland, OH	3	815,569	719,970	31.4%	52.9%	71.7%	9.2%
Dallas-Fort Worth, TX	2	2,144,860	1,935,285	26.7%	48.2%	70.6%	10.5%
Denver, CO	4	978,988	876,426	46.2%	71.5%	88.9%	5.5%
Detroit, MI	2	1,869,264	1,735,050	29.2%	49.9%	67.8%	10.0%
Houston, TX	1	2,035,650	1,781,326	--	--	--	--
Kansas City, MO	1	738,891	710,847	--	--	--	--
Las Vegas, NV	4	727,775	672,082	41.2%	67.5%	85.6%	6.4%
Los Angeles, CA	4	3,261,891	2,972,179	41.7%	68.2%	86.3%	6.2%
Miami-Fort Lauderdale, FL	2	2,650,334	2,437,053	28.6%	50.9%	72.1%	9.7%
Minneapolis-St Paul, MN	3	1,184,423	1,117,593	34.0%	57.9%	77.4%	8.1%
New York, NY	3	4,857,481	4,358,363	35.2%	58.7%	78.5%	7.8%
Orlando, FL	3	916,023	774,011	30.6%	53.0%	73.1%	9.2%
Philadelphia, PA	4	2,062,217	1,977,375	38.3%	60.8%	78.1%	7.1%
Phoenix, AZ	3	1,687,727	1,462,711	33.3%	57.2%	78.0%	8.1%
Pittsburgh, PA	2	937,244	857,715	30.2%	50.7%	68.7%	9.7%
Portland, OR	4	788,667	704,802	41.2%	65.2%	83.8%	6.5%
Riverside, CA	4	1,614,609	1,286,333	38.5%	62.9%	82.1%	7.0%
Sacramento, CA	3	823,012	691,657	32.1%	54.6%	76.2%	8.6%
San Antonio, TX	1	822,441	726,813	--	--	--	--
San Diego, CA	4	1,031,653	840,656	44.1%	70.1%	88.3%	5.8%
San Francisco, CA	3	1,302,352	1,195,781	37.7%	62.3%	81.5%	7.2%
Seattle, WA	4	1,295,985	1,151,224	41.8%	67.8%	85.8%	6.2%
St. Louis, MO	3	1,089,503	990,363	31.6%	54.6%	75.9%	8.6%
Tampa, FL	3	1,277,509	1,148,726	31.6%	53.4%	72.6%	9.0%
Washington, DC	4	1,881,957	1,826,347	45.0%	68.9%	85.3%	5.7%

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