By Tom Raub, CCIM
Vermont state law requires that a real estate agent must have a contract in place with either the seller or the buyer before showing or discussing details of a property with a prospective purchaser. Whether you are a buyer or seller of property it is very important to understand from the onset who the real estate agent represents.
A common buyer misunderstanding is because a buyer asks a real estate agent to assist them in obtaining a property, the Agent is representing the buyer and their interests. Unless the buyer and the real estate agent have contracted for representation by both signing a Buyer-Client Service Agreement, the real estate agent is representing the seller.
The contract that the real estate agent has with the buyer or seller establishes a fiduciary relationship with duties and obligations that the agent has to the Principal (buyer or seller who signed agreement with agent). These duties include:
- Loyalty - acting at all times in the best interest of Principal
- Obedience - obey promptly and efficiently all lawful instructions of principal
- Disclosure - must disclose to the principal all relevant information such as:
1. All offers
2. Identity of all purchasers or sellers
3. Facts affecting value
4. Potential buyers (or sellers) willingness to pay more or sell for less
5. Urgency of need for action.Must disclose to Principal any and all information prospective buyer (or seller) provided to Agent. NO confidentiality exists except between Agent and Principal.
- Confidentiality - Agent shall safeguard the confidence and secrets of the Principal
- Reasonable Care and Diligence
- Accounting
The duties and obligations noted above provide to the Principal an obvious advantage in the real estate transaction. Therefore, it is becoming more common for buyers to seek their own representation and have this resource available to them rather than the seller. This is accomplished by the buyer contracting with a real estate agent for representation by signing a Buyer-Client Service Agreement.
This information is provided for reference purposes only. You may want to consult with legal counsel on current Vermont State laws.
