Prior to July of 2005 the majority of real estate agents in Massachusetts represented the Seller and not the Buyer in real estate transactions. Research determined that many buyers were not aware that their agent was actually working for the seller. As a result, new agency laws were adopted permitting real estate offices to offer both Seller and Buyer agency. A critical piece of the law is that consumers must be informed about how agency works. An Agency Disclosure Form must be presented and discussed at the first personal meeting to discuss a specific piece of property with a Buyer or Seller client. The consumer is asked to sign the form, acknowledging that they understand who works for them and who does not.
The change in the law has, from a practical standpoint, made it much easier to meet fiduciary responsibilities to a client, whether it be a Buyer or a Seller. Single agency, where an agent represents either the Buyer or the Seller has specific duties. Those duties consist of obedience to lawful instruction, loyalty, disclosure of material facts, confidentiality, accounting of funds and property, reasonable care and due diligence. Another form of agency is Dual Agency. In a Dual Agency situation, one agent represents both buyer and seller. Under the law, this requires informed consent and allows for a lesser level of service to the consumer. Lastly, Designated Agency is where, within one firm, an agent represents only one party to the transaction and a second agent is designated to represent the other party. There is also something called a Facilitator. Each of these types of agency carry different obligations and the consumer must be informed about what these are.
