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Be Aware of Dual
Agency When Selling and/or Buying Real Estate If you've heard the term "dual agent" used before, it was probably in the context of a James Bond movie, but in the real estate world, it means something much less sinister! Dual agency occurs when the same office employs the Listing Agent and the Buyer's Agent. For a thorough explanation of the distinction between these two agency types, please refer to Rich's section "Agency Disclosure" on this website. There is a mandatory disclosure that all agents must make at the first meeting with their clients, under the Code of Massachusetts Regulations ("CMR") Section 3.00 (13), which details the types of agency relationship and to whom the agent owes his duty of loyalty. Typically, all real estate agents owe this loyalty to the seller, with the exception of a Buyer's Agent or a Dual Agent. While a Dual Agent works for both the Buyer and the Seller, he does not owe an undivided fiduciary duty to either Buyer or Seller, but rather must deal with each fairly and honestly. A Dual Agent must disclose his unique role at the initial meeting with his client, and must obtain the informed consent of both Buyer and Seller. Any undisclosed dual agency is illegal in Massachusetts. Equally clear under Massachusetts's law is the idea of "assumed knowledge" between different branches of the same brokerage house. Assumed knowledge is imparted on one branch of a brokerage house, if any other branch of that same brokerage house employs the Listing Agent of a property. To that end, if Real Estate Co. "X" has a listing for a home at its South End branch, then the Back Bay branch of Real Estate Co. "X" is assumed to have knowledge of the same property. If a Buyer's Agent of Real Estate Co. "X" brings a buyer to the property, there must be a mandatory disclosure of dual agency, since both the Buyer's Agent and Listing Agent work for the same brokerage house. No matter whether you employ the services of a Buyer's Agent, Listing Agent, or Dual Agent, always be sure you are given (and you read!) the mandatory agency disclosure form at the first meeting you have with your agent. This form is required for your protection and should help you to determine the different roles, responsibilities, and duties of each type of agency. Happy house hunting! Eric Cataldo Gilmartin, McGence & Ross 376 Boylston Street Boston MA 02116 Tel: (617) 375-9000 Fax: (617 375-5700 Email: ecataldo@gmcrlaw.com Web: www.gmcrlaw.com |