Agency Agreement
Before working with any real estate licensee, whether you are a buyer or seller, you are entitled to information that will allow you to make an informed choice as to your representation. The text below is from the Missouri Broker Disclosure Form prescribed by the Missouri Real Estate Commission January 1, 1999.
Introduction
Missouri law allows licensees to work for the interest of one or both of the parties tot he transaction. The law also allows the licensee to work in a neutral position. How the licensee works depends on the type of brokerage service agreements involved. Since the sale or lease of real estate can involve several licensees, it is important that you understand what options are available to you regarding representation and to understand the relationships among the parties to any transaction in which you are involved.
Missouri laws require that if you want representation, you must enter into a written agreement. This may or may not require you to pay a commission. You do not need to enter into a written agreement with a transaction broker unless you intend to compensate this licensee. These agreements vary and you may also want to consider an exclusive or nonexclusive type of relationship.
If you choose not to be represented by an agent, the licensee working with you may be working for the other party to the transaction.
Choices Available to You in Missouri
Seller's or Landlord's Limited Agent
Duty to perform the terms of the written agreement made with the seller or landlord, to exercise reasonable skill and care for the seller or landlord, and to promote the interests of the seller or landlord with the utmost good faith, loyalty and fidelity in the sale, lease, or management of property.
Buyer's or Tenant's Limited Agent
Duty to perform the terms of the written agreement made with the buyer or tenant, to exercise reasonable skill and care for the buyer or tenant and to promote the interests of the buyer or tenant with the utmost good faith, loyalty and fidelity in the purchase or lease of property.
Sub-Agent (Agent of the Agent)
Owes the same obligations and responsibilities as the Seller's or Landlord's Limited Agent, or Buyer's or Tenant's Limited Agent. Seller or landlords, or buyers or tenants may authorize their agent to offer sub-agency to other firms.
Disclosure Dual Agent
With the written consent of all parties, represents both the seller and the buyer or the landlord and the tenant.
A Disclosed Dual Agent may disclose any information to either party that the licensee gains that is material to the transaction.
A dual agent may not disclose information that is considered confidential, such as:
- Buyer/Tenant will pay more than the purchase price or lease rate
- Seller/Landlord will accept less than the asking price or lease rate
- Either party will agree to financing terms other than those offered
- Motivating factors for any person buying, selling or leasing the property
- Terms of any prior offers or counter offers made by any party
Designated Agent
Acts as your specific agent, whether you are a buyer or tenant, or seller or landlord. When the broker makes this appointment, the other real estate licensee in the company do not represent you.
There are two exceptions with both resulting in dual agency:
- The agent representing you as a buyer or tenant is also the agent who listed the property you may want to buy or lease.
- The supervising broker of two designated agents becomes involved in the transaction.
Transaction Broker
Does not represent either party, therefore, does not advocate the interest of either party.
A transaction broker is responsible for performing the following:
- Protect the confidences of both parties
- Exercise reasonable skill and care
- Present all offers in a timely manner
- Keep the parties fully informed
- Account for all money and property received
- Assist the parties in complying with the terms and conditions of the contract
- Disclose to each party of the transaction any adverse material facts known by the licensee
- Suggest that the parties obtain expert advice
A transaction broker shall not disclose:
- Buyer/Tenant will pay more than the purchase price or lease rate
- Seller/Landlord will accept less than the asking price or lease rate
- Seller/Landlord will accept financing terms other than those offered
- Motivating factors of the parties
A transaction broker has no duty to:
- Conduct an independent inspection of, or discover and defects in, the property for the benefit of either party
- Conduct an independent investigation of the buyer's financial condition.
Other Agency Relationships
Missouri law does not prohibit written agency agreements which provide for duties exceeding that of a limited agent described in this pamphlet.
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