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AGENCY RELATIONSHIP IN A
REAL ESTATE TRANSACTIONS
DISCLOSURE!
MINNESOTA LAW REQUIRES that early in any relationship, real estate brokers or salespersons discuss with consumers what type of agency representation or relationship they desire. The available options are listed below.
If you desire representation, you must enter into a written contract according to state law (a listing contract or a buyer representation contract). Until such time as you choose to enter into a written contract for representation or assistance, you will be treated as a customer of the broker or salesperson and not represented by the brokerage. The broker or agent would then be acting as a Seller's Broker (see paragraph I below), or as a non-agent (see paragraph IV below).
I. Seller's Broker: A broker who lists property, or a salesperson who is licensed to the listing broker, represents the Seller and acts on behalf of the seller. A listing broker or salesperson working with a buyer may also act as a subagent of the seller, in which case the Buyer is the broker's customer and is not represented by that broker. The broker must also disclose to the Buyer of any material facts of which the broker is aware that could adversely and significantly affect the Buyer's use or enjoyment of the property. If a broker or salesperson working with a Buyer as a customer is representing the Seller, he or she must act in the Seller(s)' interests and must tell the Seller(s) any information disclosed to him/her, in that case, the Buyer will not be represented and will not receive advice and counsel from the broker or salesperson.
II. Buyer's Broker: A Buyer may enter into an agreement for the broker or agent to represent and act on behalf of the Buyer. The broker may represent the Buyer only, and not the Seller, even if the seller is paying him in whole or in part. The broker must disclose to the Buyer any material facts of which the broker is aware that could adversely and significantly affect the Buyer's use or enjoyment of the property.
III. Dual Agency: A Broker representing both Seller and Buyer: Dual agency occurs when one broker or salesperson represents both parties to a transaction, or when two salespersons licensed to the same broker each represent a party to the transaction. Dual agency requires the informed consent of all parties, and means that the broker and salesperson owe the same duties to the Seller and the Buyer. This role limits the level of representation the broker and salespersons can provide, and prohibits them from acting exclusively for either party. In a dual agency, confidential information about price, terms and motivation for pursuing a transaction will be kept confidential unless one party instructs the broker in writing to disclose specific information about him or her. Other information will be shared. Dual agents may not advocate for one party to the detriment of the other. Within the limitations described above, dual agents owe to both Seller and Buyer the fiduciary duties. Dual agents must disclose to Buyers any material facts of which the broker is aware that could adversely and significantly affect the Buyer's use or enjoyment of the property.
IV. Non-agent: A broker or salesperson may perform services for either party as a non-agent. If that party signs a non-agency services agreement. As a non-agent the broker or salesperson facilitates the transaction, but does not act on behalf or either party. The non-agent broker or salesperson owes only those duties required by law or contained in the written non-agency agreement.
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