For Buyers

Licensee Representation

When dealing with a real estate licensee in the purchase of real estate, you are either a client or a customer of that licensee. A licensee has certain duties and obligations to assist you throughout the home buying process. If you wish to be represented in a real estate purchase, you will become a client of the licensee. The licensee chosen represents your interests. In some transactions, the buyer and seller will receive the real estate services from the same responsible broker or from licensees associated with that broker. In other transactions, there can be a written agreement in which the broker does not represent either party. In other transactions, neither party wishes to be represented. No matter what type of relationship exists between you and the broker, a written agreement must be entered into. The different types of relationships a licensee can offer you are described in detail below.

Licensee Representing the Buyer

  • Any licensee representing you has the following duties and obligations to you:
  • To perform the terms of any written agreement made with you;
  • To exercise reasonable skill and care for you;
  • To promote your interest with the utmost good faith, loyalty, and fidelity, including: seeking a price and terms which are acceptable to you, presenting all written offers to and from you in a timely manner regardless of whether you are already a party to a contract to purchase property or already a party to a contract or a letter of intent to lease, disclosing to you any adverse material facts known by the licensee, advising you to obtain expert advice as to material matters about which the licensee knows but the specifics of which are beyond the expertise of the licensee;
  • To account in a timely manner for all money and property received
  • To comply with any applicable federal, state, and local laws, rules, regulations, and ordinances, including fair housing and civil rights statutes or regulations.

Licensee Representing the Buyer and the Seller

When a licensee has a home listed for sale and also represents a buyer who wants to purchase the home, the licensee becomes a limited agent of the buyer and the seller. A licensee may act as a limited agent only with the informed written consent of the buyer and seller and has the following duties and obligations:

  • To perform the terms of any written agreement made with the buyer and the seller;
  • To exercise reasonable skill and care for the buyer and seller;
  • To present all written offers between the buyer and seller in a timely manner regardless of whether the buyer or seller is already a party to a contract to purchase property or is already a party to a contract or a letter of intent to lease;
  • To disclose to the buyer and seller adverse material facts known by the licensee;
  • To advise the buyer and seller to obtain expert advice as to material matters about which the licensee knows but the specifics of which are beyond the expertise of the licensee;
  • To account in a timely manner for all money and property received;
  • To comply with any applicable federal, state, and local laws, rules, regulations, and ordinances, including fair housing and civil rights statutes or regulations.
  • When a licensee has a home listed for sale and another licensee associated with the same responsible broker represents a buyer who wants to purchase that home, those licensees must act as limited agents for that transaction, unless the responsible broker offers appointed agency.

Licensee Representing the Buyer as an Appointed Agent

A licensee who has been selected by the responsible broker to act as an appointed agent for you owes the same duties and obligations as a licensee representing a buyer described previously. Unlike limited agency, a licensee acting as an appointed agent for you can fully represent you if you become interested in a property listed with another licensee associated with the same responsible broker.

Licensee Acting as a Transaction Broker

Any licensee acting as a transaction broker to a buyer has the following duties and obligations:

  • To perform the terms of any written agreement made with you;
  • To exercise reasonable skill and care for you;
  • To present all offers in a timely manner;
  • To account in a timely manner for all money and property received;
  • To comply with any applicable federal, state, and local laws, rules, regulations, and ordinances including fair housing and civil rights statutes or regulations;
  • To disclose to you all adverse material facts known by the licensee;
  • A transaction broker may not advise any party to a transaction to the detriment of another party.

Buyer Not Wanting a Written Relationship Agreement with a Licensee

You may choose not to utilize the services of a real estate licensee. In that instance, a buyer agency agreement will not be entered into. If no written relationship exists between you and the licensee, you must be very careful as to not release any confidential information to the licensee. You must assume that anything said to the licensee will be communicated to the seller who is the licensee’s client. Since there are several legal documents involved in the purchase of real estate, you may wish to work with an attorney to draft or interpret these documents.