Consumer Notice
The new "
Agency Disclosure" law (effective Nov. 25, 1999) affects the way
real estate is practiced in Pennsylvania.
The purpose of the new law is to help consumers by clarifying, up
front and in writing, who works for whom in a real estate
transaction, thereby making consumers more knowledgeable about what
service options are available to them. Pennsylvania joins 47 other
states in clarifying agency relationships between consumers and real
estate practitioners.
The new law is beneficial because it requires a clear and timely
disclosure in the form of a written Consumer Notice that a consumer
receives during the initial meeting with the real estate agent. This
notice enables buyers, sellers, lessors and lessees to make informed
decisions.
Under the new law, all licensed real estate professionals
(licensees) may serve consumers in the following relationships:
Seller Agency
--the licensee works only for the seller, owing the seller client
loyalty, confidentiality and a good faith effort to find a buyer for
the property.
Buyer Agency
-- the licensee works only for the buyer, owing the buyer client
loyalty, confidentiality and a good faith effort to find a property
for the buyer.
Dual Agency
-- the licensee acts as the agent for both the seller and the buyer
in the same transaction, with the consent of all parties. Real
estate companies have buyer and seller clients; it is not possible
to predict when a buyer client will choose to buy a property from a
seller client.
While this may put the agent in the middle, it does assure that
sellers have the greatest exposure for their properties and that
buyers can make selections from the entire market. A dual agent must
provide services fairly, without promoting either party's interests
over the other.
Designated Agency
-- created for the in-house transaction where both buyer and seller
are represented by individual agents in the same company. It allows
the agent selected by the buyer to continue representing the buyer's
interest while the agent selected by the seller continues to
represent the seller's interests. This allows the consumers to
retain the services they sought when choosing real estate agents to
advocate for them.
Transaction Licensee
-- the license provides communication, document preparation
services, or similar real estate related services without being an
agent or advocate for either the seller or the buyer.
A transaction licensee could not disclose the fact that the seller
will accept a price less than the asking price, or that the buyer
will pay a higher price than the amount offered. A transaction
licensee may not disclose any information deemed confidential by the
consumer.
Every consumer seeking real estate services will be asked to sign
the Consumer Notice which outlines their options for representation.
By requesting this form, a real estate professional is doing his job
and fulfilling the requirements of the law. Even if you are
attending open houses, you will be asked to sign the form.
The Consumer Notice is not a contract and does not commit the
consumer to any specific relationship. You are required to sign this
form at the first meeting with the agent in order to help you make
informed decisions and to reduce the potential for confusion later
in the transaction.
Once you select the relationship which best meets your needs, you
will sign another for granting permission for such a relationship.
This form will detail the duties owed to you within the chosen type
of relationship.
The advantages to the consumer of the new law included the
following: better understanding for whom the licensees work in a
transaction; clarification of the licensee's role and
responsibilities in a real estate transaction; definition of the
duties real estate licensees owe to consumers; and the requirements
that certain information appear, in writing, in seller buyer
contracts. Consumers with questions should contact their real estate
agent, or visit the Pennsylvania Association of Realtors
website at www.parealtor.org.
The Lancaster County of Realtors representing more than 1,100
members involved in all aspects of the real estate industry, is one
of more than 1,800 local associations nationwide which comprise the
National Association of Realtors.--this article was taken from the
December 9, 1999 Real Estate Weekly.
717-442-9221
610-384-8433