New Real Estate Laws Greater Boston Home Team

Real Estate Laws

On July 1, 2005 the rules concerning Real Estate Agency in Massachusetts changed.

The official Massachusetts state "Agency Disclosure Form" has changed as well.

Terms underlined in the text below are defined in our glossary of real estate terms, roll your mouse over them display their definition.

Uninformed consumers will be affected by the July 1, 2005 changes in the rules affecting Massachusetts real estate agency. The official Massachusetts "Agency Disclosure Form" has changed as well.

The rules, processes and customs that govern real estate in Massachusetts are different from those in many other states.

What is real estate agency and why is it important to you?

Real estate agency rules govern the way that agents

Definition:

AGENT – A real estate agent is a person that has taken courses required by the state, passed the required exam and met the state's qualifications to obtain a license to work under the supervision of a real estate Broker.

To maintain an active real estate license, the agent must stay current with continuing education as required by the state.

and their agencies operate and interact with consumers. The new rules have created different types of relationships between agents, agencies and consumers that change the responsibilities and liabilities for agents, add some disclosure requirements and reduce or eliminate some other disclosures.

It is important to understand the type of relationship that a consumer has with a real estate agent and their real estate agency can affect the degree of information and advocacy the consumer receives.

To be sure you get the degree of service that you want from both your agent and agency, and most importantly, to be sure the level of service you expect will not change in the middle of your real estate transaction, invest the time to learn about all of the relationship options available to you and how they can affect your buying or selling experience.

Definition:

SELLER'S AGENT or SELLER'S BROKER – A seller's agent or broker is an agent that has agreed to represent the interests of the seller in a real estate transaction, typically by listing the seller's home for sale. "The broker, and its' subagents, represent the seller. They owe the seller undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. They must put the seller's interest first and negotiate for the best price and terms for their client, the seller."

– From the Massachusetts Board of Registration of Real Estate of Real Estate Broker's and Salesmen's Mandatory Agency Disclosure on Agency Relationship.

Definition:

BUYER'S AGENT or BUYER'S BROKER – A buyer's agent or broker that has agreed to represent the interests of the buyer in a real estate transaction. "The broker owes the buyer undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability.

The broker must put the buyer's interest first and negotiate for the best price and terms for their client, the buyer."

– From the Massachusetts Board of Registration of Real Estate of Real Estate Broker's and Salesmen's Mandatory Agency Disclosure on Agency Relationship.

Definition:

DUAL AGENCY – In Massachusetts, an individual real estate agent may elect to represent both a seller and a buyer on the same property, which is known as “dual agency”. In addition, a real estate agency (and it's broker or manager) is in “dual agency” when a buyer's agent and a seller's agent in the same agency represent their clients on the same property.

According to the state, “dual agency” “cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions which is required of an exclusive seller or buyer agent.” “Written consent to dual agency must be obtained by the real estate agent prior to the execution of an offer to purchase a specific property.” - quotes are from the Massachusetts “Mandatory Agency Disclosure”, revised July 1, 2005. For further information, refer to the disclosure.

Definition:

DESIGNATED AGENCY – In Massachusetts, a real estate agent can be designated by another real estate agent (typically an office manager or broker) to represent either a buyer or seller on the same property, provided that the buyer or seller expressly agrees to such designation. The “designated” real estate agent is then the agent for either the buyer or seller, who becomes their client.

The designated agent owes the buyer or seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put their client's interests first and negotiate for the best price and terms for their client. In situations where the appointing agent designates another agent to represent the seller and an agent to represent the buyer then the appointing agent becomes a dual agent and cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions which is required of an exclusive seller or buyer agent.

The dual agent does not represent either the buyer or the seller solely, only the designated agents represent their client's interest. The written consent for designated agency must contain the information provided for in the regulations of the Massachusetts Board of Registration of Real Estate Brokers and Salespeople. A sample designated agency consent is available at the Board's website at: www.mass.gov/dpl/re.

Definition:

FACILITATOR – When a real estate agent or broker assists a buyer and seller together on the same property and does not represent or advocate for either party, that agent is acting as a facilitator.

What are the types of relationships that you can have with a real estate agent and agency?

Massachusetts' real estate agents can work with consumers as Seller's Agen ts, Buyer's Agents, Dual Agents, Designated Agents and Facilitators. (Facilitators are not really operating as true agents, but are governed and licensed by the state as agents.)

"Designated agency" is a form of "dual agency" in Massachusetts. Undisclosed “dual agency” is not legal here.

What is the "Agency Disclosure Form" and how does it affect you?

The statute requires that the Agency Disclosure Form is presented to the consumer by ALL real estate agents at “the first personal meeting to discuss property" (except open houses), so that the consumer is fully informed about the type of relationship that they are entering into with that agent and agency.

It has come to our attention that some firms are not giving this disclosure in a timely manner. In addition, some firms are also changing this form from its original form as posted on the Massachusetts State website.

To be sure that you are fully informed, click here to download the official "2005 Disclosure Form" from the state website in Adobe® PDF format.

Then, compare this form to the one the agent shows you.

What type of agency relationship(s) can you have with us at the Greater Boston Home Team?

Sometimes what you do NOT get in a relationship is as important as what you do get.

We DO NOT practice designated agency or dual agency. Therefore, we can serve as your buyer's agent or your sellers agent without the possibility of a conflict of interest that could arise with designated or dual agency.

Unlike the majority of agents that market themselves as Buyer's Agents or Seller's Agents in Massachusetts, we CAN and WILL guarantee that your agent as well as ALL of the other members of our agency will remain your agents and advocates throughout your entire real estate transaction. ALL of us will ALWAYS be 100% on your side 100% of the time during your purchase or sale.

Definition:

REALTOR – A real estate agent or broker that is a member of the National Association of Realtors is known as a Realtor. Realtors must adhere to the Realtor's Code Of Ethics in dealing with the public and each other.

If you want a Realtor to work hard for you, protect your interests, safeguard your deposit from loss and guarantee that your transaction will be free of potential conflicts of interest, then you need to establish the correct written relationship with an experienced “Uncompromised Real Estate representative” as soon as possible.

How can you learn more or get answers to specific agency questions?

We understand that real estate agency laws and relationships can be confusing to the average consumer. If you have any questions, our principal broker is an expert on Massachusetts'' agency relationships and would be happy to answer any questions that you might have.

Please feel free to contact us for answers to any agency questions that you might have.