Agency & What you Should Know About It

Disclosure & Required Forms

• Tennessee
  Tennessee law does not require a written disclosure upon first contact, only verbal. Written disclosure is required only prior to the actual writing of any contracts (whether for purchase or listing).
• Virginia
  Virginia law requires that upon first contact with a customer that a disclosure be presented and signed.
  The disclosure itself is not a contract with the agent, but serves to educate customers (potential buyers and sellers) of the four different ways in which an agent may work with a buyer and/or seller and also spells out for them what the agent is to do for represented party in each of the four scenarios. Signing the disclosure is simply an acknowledgement to the State that you have received & reviewed this information.

• Seller's Agent: representing and acting for the seller only. May be a listing agent, or any any agent licensed to the listing broker, or a selling subagent.
• Buyer's Agent: representing and acting for the buyer only. As with a listing contract with sellers, an agreement for buyer representation must be in writing.
• Dual Agent: one licensee representing both the seller and the buyer as clients in one transaction, or two agents licensed to the same broker one of whom represents the seller and one of whom represents the buyer in one transaction. In a dual agency, all licensees are deemed to represent both the seller and buyer. This relationship requires full disclosure and informed consent of both parties. Dual agents must not advocate or negotiate for either party, and must not act to the detriment of either party.
• Nonagent: a real estate licensee who works for a buyer or seller in a transaction without agency representation. Nonagents may perform services for consumers, but does not represent them. Nonagents are bound by license law and common law, and have limited fiduciary duties.
  • TN agents working in a nonagent capacity are called facilitators. Unless a contractual relationship is established all agents are considered facilitators.
  • VA agents working in nonagent capacities do so under state law as an independent contractors.

If there is to be any agency representation, or a nonagency relationship, there must be a written contract with all elements required by statute for the particular agreement.

• Listing contracts must be signed before offering/advertising a property for sale or lease.
• Buyer representation contracts must be signed before taking any action to represent a buyer (such as showing them properties currently offered for sale) and before a purchase agreement is signed.
• Nonagency Services Agreements must be signed before performing services requiring a license.

If there is to be any agency representation, or a nonagency relationship, there must be a written contract with all elements required by statute for the particular agreement.

• Customers are consumers that work with an agent without any contract with that agent.
• Clients are customers (buyer or seller) that have entered into a contract with an agent

What you are entitled to by real estate agents

• Loyalty, acting only in our client's best interest.
• Obedience, carrying out all lawful instructions from our client.
• Disclosure, revealing to clients "all material facts of which broker/salesperson has knowledge which might reasonably affect our client's rights and interests."
• Confidentiality, keeping client's confidences "unless required by law to disclose specific information." This means that Realtors are not to disclose information that might harm our client's interest. For instance, if we represent the seller, the price the person is willing to accept. However, any "material facts of which the broker is aware that could adversely and significantly affect the buyer's use or enjoyment of the property" must be disclosed. For example, if the seller's agent knows the roof leaks, he or she is required to disclose that fact.
• Reasonable care, which the Realtor is to exercise in performing duties as an agent.
• Accounting, which means the "broker/salesperson will account to client(s) for all client(s)' money and property received as agent."

Selling Agency

• As a matter of general practice we represent seller's in an exclusive manner. All fee's are negotiable.
• You may choose whether or not to compensate buyer's agents (We recommend that you don't since they are not working for you at all, in reality they are concerned with only their clients best interests at heart.)
• In the event that the Listing agent secures an offer from one their clients, you may:
  1. Allow the agent to present offers from potential buyers and assist them with only paperwork and transmittal of legally required documents. This is done with full disclosure to both parties and limits the agents role in negotiations to that of a facilitator.
  2. Or you may choose to have another agent within our office be assigned to the buyer within the office
  3. Other options such as legal consultation may be considered on a case by case situation.

Buyers Agency

• As a matter of general practice we represent buyer's in an exclusive manner. All fee's are negotiable. However we require at least a portion of payment to be made up front by the client before services are performed.

Nonagency
Facilitators (TN) or Independent Contractors (VA)

• Nonagency with Buyers: Usually this is the case when someone wants to see a listed property and then wants to write up an offer. Allows the potential buyer to remain free to work with any agent they choose and not be obligated to pay any fees themselves to the agency. In this capacity the real estate personnel can not advocate or negotiate for either party. They of course are still bound by license law and common law, and have limited fiduciary duties.
• Nonagency with Seller: Our FSBO option, available to sellers who want to save money on real estate commissions by doing most of the work themselves, is an example of a nonagent relationship. With the discounted fee, we put the property on the MLS and company website for maximum exposure, install an APPLE REALTY & AUCTION yard sign if wanted, provide a lock box if needed, and provide all necessary real estate forms. The rest is up to the seller (advertising, open houses, setting up showings, qualifying buyers, negotiating). Under the FSBO option, the seller does not receive the benefit of our advice or counsel. And we do not owe any party to the transaction any of the fiduciary duties listed above, unless those duties are included in the written nonagency services agreement. If the property does not sell quickly or the seller becomes overwhelmed with the added responsibilities, they can switch to an exclusive full service listing contract at any time.