Possible Representation of More Than One Buyer or Seller
Disclosure and consent document for POSSIBLE REPRESENTATION OF MORE THAN ONE BUYER OR SELLER will require signatures by both the seller and buyer at the beginning of a real estate transaction. The buyer will sign when submitting an offer and the seller when signing the listing agreement. This representation is at the brokerage level regardless who the salesperson may be. Legally, the broker represents you in a transaction, and the salesperson is an associate licensee of the broker, commonly called agents. Think Coldwell Banker, not Vick.
A little education concerning this important disclosure is required as agents have a tendency to present non-offer sheet documents and say “sign here” without an explanation. This document and other ancillary documents are important, particularly if disputes arise. So what exactly would you be consenting to by signing this disclosure? It isn’t solely allowing a broker to represent a seller and buyer for the same property. Though that may be the case, there are other possibilities.
The California Association of Realtor’s document offers four discussion points.
A broker may be representing many buyers all looking for a property to purchase. The brokerage may represent multiple buyers competing to purchase the same property. It does not matter who’s the listing broker. “The broker will not limit or restrict any particular buyer from making an offer on any particular property.”
A broker can have multiple listings that may appeal to the same buyer. The brokerage is required to market all their listed properties to all prospective buyers and attempt to find buyers for all their listed properties.
A seller is consenting to allow a broker to represent a prospective buyer of the seller’s property. Conversely, a buyer is consenting that a broker may represent a seller of a home in which the buyer would like to make an offer. This relationship is called a dual agency. Remember, this is at the brokerage level.
The broker, without prior written consent of the parties involved, may not disclose that a seller is willing to sell their property for less than asking or that a buyer is willing to offer more than asking. However, the dual agent is required to disclose material facts affecting the value or desirability of the property.
The buyer needs to understand that the seller or listing agent may disclose the existence of or terms of offers to other parties. The buyer can request all parties and their agents sign a written confidentiality agreement to prevent any such disclosures. The seller can also request confidentiality from the listing broker of such information in the listing agreement.
That, in a nutshell, is what you consent to when signing the POSSIBLE REPRESENTATION OF MORE THAN ONE BUYER OR SELLER. You should also now know what dual agency means. Make sure always to read and understand what you are being asked to sign during the real estate selling/purchasing process.
Our next discussion will drill down deeper into the dual agency shedding some light on agent double-ending. That is when one licensee “represents” the buyer and seller for the same property. Look for it, coming soon.