(In all cases, please refer to Buying and Selling a Home in SD - A Consumer Guide, published by the SD Real Estate Commission.)
The Agency Agreement Addendum
· As the consumer guide states on page eight:
o …”Once you sign the buyer agency [broker] agreement, your agent will then present an agency agreement addendum to the buyer. This addendum becomes part of the buyer agency agreement. It further explains agency relationships in a real estate transaction and allows you to instruct your agent to act solely as your agent or [allows them to act as] a limited agent.”
o “If your agent’s responsible broker offers appointed agency you may elect to choose that option.”
§ Example from page 3 of the consumer guide explains that agents appointed by their responsible broker to represent their clients can act as a single agent for their clients, not limited agents.
§ Duties owed to a buyer by agent in single agency are outlined in the consumer guide on pages 4-5.
§ Single agent is defined on page 2 as any licensee (real estate agent) who represents only one party (in this case, only the buyer) to the transaction
o Even in a company with appointed agency, the buyer could decide to buy a home which would put the agent in limited agency. That would occur if the home was listed by your agent (or a team member), the responsible broker of the firm, or an agent designated by the responsible broker to be a firm’s designated agent. All of those names will be listed in paragraph II of the agency agreement addendum.
§ The definition from page 2 of the consumer guide states a limited agent is one who “has a written agency relationship with both the seller and the buyer in the same transaction.” When this happens the fiduciary duties of the broker change so the buyer and seller are treated equally with the broker not being partial to either party.
§ The buyer is still entitled to all other fiduciary duties during limited agency.
§ Duties owed to a buyer by a limited agent outlined in the consumer guide on page five are:
· Perform the terms of any written agreement with buyer & seller
· Exercise reasonable skill & care for buyer & seller
· Present all written offers in a timely manner
· Disclose adverse material facts known by licensee (real estate agent)
· Advise buyer or seller obtain expert advice for material fact about which licensee knows but the specifics of which are beyond the expertise of the licensee
· To account in a timely manner for all money and property received
· Comply with applicable federal, state, and local laws, rules, regulations and ordinances, including fair housing & civil rights statutes and regulations.
Agency, whether it be single agency, appointed agency, or limited agency, includes the duty to provide reasonable skill and care. This includes educating buyers about market history and current available data regarding a property they wish to purchase.