Agency is a fiduciary relationship between a Principal/Client and an agent arising out of a brokerage agreement whereby the Agent is engaged to perform certain acts on behalf of the Principal in dealing with a third party.
In the past, all Agents represented the Seller, whether their company had the listing or showed a property listed by another company. Any information the Agent knew about a Buyer was passed on to the Seller if it was useful in gaining a favorable position for the Seller. Consumer laws have changed and, in today’s marketplace, Buyers have choices about whether or not they want representation during their real estate transaction.
When you choose an Agent to assist you in the purchase of property, it is usually through contact with the Agency for one of the following reasons: 1) Because they have a listing you want to purchase; 2) The Agent was referred to you by someone else; 3) Perhaps you want the specialty services of that Agency. Without a detailed explanation about your choice of representation, you might assume that the Agent is going to represent you in throughout all aspects of the property purchase.
Why might you think that? Until the “Written Disclosure Laws” were enacted, many Buyers just assumed the Agent they were working with was representing them. “My agent” and “my broker” were common statements made by Buyers. After all, the person a Buyer chooses to help them purchase real estate has constant contact with them and develops a “closeness” and sometimes even a friendship with them. Because of these Buyer misconceptions, Disclosures of Agency Relationships laws were enacted here in New Hampshire so all Buyers would understand their rights and positions as consumers of real estate.
Before you view property with a real estate agent, New Hampshire Law RSA 331-A and N.H. Real Estate Commission Regulations Rea 701.01 – see Administrative Rules requires that all real estate licensees provide you with a written statement disclosing which party they represent. This is not a contract of any kind. It simply EXPLAINS your options as a real estate consumer, in this case as a Buyer. You have the choice of hiring a Buyer Agent to represent you (this would require a written contract between you and your agent) or you can view property with a real estate agent and remain a Customer, which many Buyers choose to do (you would not be represented by the agent in this instance). When Sellers list their property for sale, they must sign this very same form, explaining the types of agency available to them. It also explains to them how a Buyer might be represented when viewing their listed property.
Types of Agency available to Buyers of Real Estate Located in New Hampshire:
Buyer's Agent (Buyer Agency):
A Farms & Barns' agent may represent you as your agent. This means that the agent gives priority to your interests. This form of agency is bound by a written contract spelling out the duties and obligations of the parties. The agent becomes your exclusive representative.
However, you certainly can opt to work with an agent without a Buyer Agency Agreement. Once you get to know the agent and you both agree that Buyer Agency will be beneficial to you, you can proceed to the next step. Until that time, you may:
Work with an agent who doesn't represent you but performs specific services (Buyer Facilitator):
One of our agents may work with you without being a Buyer's Agent or legal representative in the process. Some buyers prefer this approach, which allows them to work with the listing agent of a property directly, and doesn't require them to sign an exclusive contract with any one broker. Should you make the decision to hire the agent as your representative at some point during your search and you decide to pursue a property listed with Farms & Barns, you would then enter into a Dual Agency Agreement.
What is a Dual Agent?
Dual agency representation requires the knowledge and consent of both buyer and seller. In effect, the dual agent promises to serve the interests of both the Buyer Client and the Seller Client but in a limited capacity. This type of agency must be spelled out in writing prior to making an offer and better yet, prior to looking at a property whereby this type of agency may arise.
New Hampshire’s Law
Agency laws are the result of years of discussion and debate by state legislatures, industry representatives and consumer advocates. If you have questions, contact the NH Real Estate Commission
All New Hampshire real estate licensees must abide by New Hampshire’s laws. Agencies such as Farms & Barns, are also Realtors® (members of the National Association of Realtors®) and must also subscribe to the Code of Ethics
and Standards of Practice of the National Association of Realtors®.