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AGENCY RELATIONSHIPS IN

A REAL ESTATE

TRANSACTION

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WHAT ARE THE OPTIONS

CUSTOMER/FACILITATOR

SELLER - REPRESENTED BY A SELLERS BROKER - AGENT

BUYER - REPRESENTED BY A BUYERS BROKER - AGENT

DUAL AGENCY – SAME BROKER, BOTH PARTIES

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WHY HIRE AN AGENT?

REPRESENT YOUR BEST INTERESTKNOWLEDGE OF THE MARKETKNOWLEDGE OF THE LAWABILITY TO NEGOTIATEABILITY TO COMMUNICATE/COOPERATE

WITH COLLEGUESYOUR REQUIREMENTS!

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WHAT DOES AGENCY REALLY MEAN?

AN AGENT IS AN INDIVIDUAL WHO REPRESENTS THE PRINCIPAL WITH THIRD PARTIES.

AGENT

PRINCIPAL THIRD PARTY

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WHAT ARE THE FIDUCIARY DUTIES OF AN AGENT?

LOYALTY

OBEDIENCE

DISCLOSURE

CONFIDENTIALITY

REASONABLE CARE

ACCOUNTING

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WHAT DOES MINNESOTA LAW REQUIRE

EARLY DISCUSSION WITH CONSUMERS

WHO DOES THE REALTOR REPRESENT

THE RIGHTS OF THE CONSUMER

THE RESPONSIBILITIES OF THE CONSUMER

ACKNOWLEDGE RECEIPT OF THE “AGENCY RELATIONSHIP FORM”

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UNTIL THE BUYER MAKES A CHOICE ON REPRESENTATION, THE BUYER WILL BE TREATED AS A “CUSTOMER”

VERY SIMILAR TO BUYING A CAR, AN APPLIANCE OR A PAIR OF SOCKS AT J C PENNY’S

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HOW SHOULD THE “SELLERS BROKER” ACT?

SELLERS BROKER LISTS THE PROPERTY

ACTS ON BEHALF OF THE SELLER

OWES FIDUCIARY DUTIES TO THE SELLER ONLY

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WHAT ARE THE FIDUCIARY DUTIES OF A SELLERS

AGENT?LOYALTY

OBEDIENCE

DISCLOSURE

CONFIDENTIALITY

REASONABLE CARE

ACCOUNTING

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ADDITIONAL RESPONSIBILITIES

MUST DISCLOSE TO THE BUYER ANY AND ALL MATERIAL FACTS THAT COULD AFFECT THE BUYER’S ENJOYMENT OF THE PROPERTY THAT THE AGENT AND/OR SELLER HAS KNOWLEDGE OF.

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IF THE BUYER IS NOT REPRESENTED!

SELLERS BROKER MUST TELL THE SELLER ALL INFORMATION THE BUYER MAY HAVE TOLD THE AGENT. . . THE AGENT IS WORKING FOR THE SELLER!

BUYER WILL RECEIVE NO ADVICE OR COUNSEL FROM THE SELLERS BROKER/SALESPERSON

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HOW SHOULD THE BUYERS BROKER ACT?

A BUYER MAY ENTER INTO AN AGREEMENT TO HAVE A BROKER/SALESPERSON REPRESENT THE BUYER AND ACT ON THE BUYERS BEHALF.

WHO PAYS THE BROKER IS NOT AN ISSUE OF AGENCY!

SAME FIDUCIARY DUTIES AND OWES THESE DUTIES TO THE BUYER ONLY!

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BUYER MAY SIGN AGREEMENT FOR REPRESENTATION

CONTRACT FOR EXCLUSIVE RIGHT TO REPRESENT THE BUYER

CONTRACT FOR NON-EXCLUSIVE RIGHT TO REPRESENT THE BUYER

NON-EXCLUSIVE MEANS YOU CAN HIRE SEVERAL BROKER/AGENTS TO WORK FOR YOU AT THE SAME TIME

NEITHER ONE ALLOWS YOU TO BUY A FSBO WITHOUT COMPENSATION

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WHAT ARE THE FIDUCIARY DUTIES OF A BUYERS

AGENT?

LOYALTYOBEDIENCEDISCLOSURECONFIDENTIALITYREASONABLE CAREACCOUNTING

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WHAT IS A DUAL AGENT“REPRESENTS” BOTH SIDES IN A REAL

ESTATE TRANSACTION

REQUIRES INFORMED CONSENT OF BOTH BUYERS AND SELLERS

ROLE OF “DUAL AGENT” LIMITS THE LEVEL OF REPRESENTATION TO BOTH PARTIES.

MAY NOT ADVOCATE FOR EITHER SIDE

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NEITHER THE BUYER OR SELLER SHOULD DISCLOSE “CONFIDENTIAL” INFORMATION TO THE “DUAL AGENT”

LIMITS THE WORDS AN AGENT MAY USE TO THE FOLLOWING:

WOULD YOU LIKE TO ACCEPT, REJECT, OR COUNTEROFFER.

DUAL AGENCY CREATED BY THE LEGISLATURE! ! !

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DUAL AGENCY PITFALL!

. Dual agency is really no agency at all. Although most people contract with a real estate agent for their expertise and assistance, a dual

agent must legally withhold his or her expertise and assistance to a large extent because the agent is actually representing two competing sides of a transaction at one time (the buyer and the seller) and is not supposed to promote the interests of one party to the detriment of the other.

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FACILITATOR

FACILITATES THE TRANSACTION

NO REPRESENTATION TO EITHER BUYERS OR SELLERS

NO FIDUCIARY DUTIES TO EITHER PARTY, EXCEPT CONFIDENTIALITY

MUST NOT VIOLATE THE STATE LAW - DISCLOSURE.

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REALITY

BUYERS MAYBE SHOULD HAVE THEIR OWN AGENT

SELLERS MAYBE SHOULD HAVE THEIR OWN AGENT

DUAL AGENCY MAYBE SHOULD BE AVOIDED

BEING TREATED AS A CUSTOMER MAYBE IS BETTER THAN DUAL AGENCY-AT LEAST YOU KNOW WHERE YOU STAND!

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SUMMARY

BUYING AND SELLING REAL ESTATE IS NOT SIMPLE

REALTORS ARE MORE CONSCIOUS OF THEIR CLIENTS AND FIDUCIARY RESPONSIBILITIES THAN EVER BEFORE

BUYERS AND SELLERS MUST UNDERSTAND THEIR RIGHTS, RESPONSIBILITIES AND OPTIONS

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THE END

JIM MINER, REALTOR