When you first start working with a REALTOR® one of the first things they are going to ask you to do is to sign a consumer notice. So, lets review it together so you know what you are signing. If you have the copy your REALTOR® gave you work off of that, otherwise you will see that I have attached pictures of this document to use as a reference.
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The very first thing that you will notice about the consumer notice is that it states at the top that this is not a contract. A contract binds one or more people to a task or responsibility. This document does not do that, what it does is inform, and the signature you provide is to show proof that you received this document and that your REALTOR® has gone over the information within it.
The first line under the heading explains that the Consumer Notice is used as a tool to educate buyers and sellers of their rights. So again, just reiterating that this is not a contract, but in fact an educational tool used to inform buyers and sellers of their rights.
The next 4 paragraphs talk about agency. Agency refers to relationship you will have with your REALTOR®. For a more in depth review of agency you can check out my blog on agency types. So, lets review the four types of agency that this document talks about.
Seller Agent- A sellers agent is the agent helping the person selling the house. If you are selling your home, this is the type of agent you will have. Your REALTOR® has a duty to work for you in your best interest to help you accomplish the sale of your home in the way that you see best fit.
Buyer Agent- A buyers agent is the agents helping a buyer find and purchase a home. If you are looking to buy a home the agent helping you accomplish this is your buyer agent. Your REALTOR® has a duty to work for you in your best interest to help you accomplish the purchase of your home in the way that you see best fit.
Dual Agent- A dual agent represents both the buyer and seller in a transaction meaning your REALTOR® is not just representing you but the other party as well. This is a very thin line to tip toe across, but it is completely legal and common practice her in PA. However, your REALTOR® may not represent the other party without your written and signed consent to do so.
Designated Agent- This is decided by the broker, not the agent. Some brokerages allow for it and some do not. If you agent is a designated agent it means that only your agent is aloud to help you with your transaction as a buyer or a seller. a REALTOR® who does not practice designated agency has the ability to call on anyone within the brokerage to assist with your transaction. An easy way to remember this one is to think of it as the Broker either designates one agent to work for you (as a designated agent), or they do not in which case then entire brokerage works for you.
The Next bullet talks about a transactional licensee. A transactional licensee does not actually work with either party, meaning that they don't have a signed contract with you. They can however help with the transaction. If you have decided to sell or buy your home on your own a transactional licensee will show up the day of settlement to help make sure that you sign all of the documents where you need to sign and that all of your paperwork is in order. They will inform you of everything you are signing and receiving and doing, but they can not advice you or help you in any other way.
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The next section talks about Fiduciary duties that any and all REALTORS® have anyone from the pubic regardless of the agency type you have or if you are working with your own agent or a transactional licensee.
I have a whole blog dedicated to explaining the fiduciary duties, of a REALTOR® if you want more information about the different duties of a REALTOR® you have a signed contract with vs those offered to the public, but lets review the ones in this contract here and check the other blog if you need a clarification.
Reasonable skill and care. REALTORS® have a vast amount of knowledge of the real estate industry and we are held to a standard which asks that we help you understand any part that you may not within our scope of knowledge and ability.
Deal honestly. We are required to be honest with you. We can not lie, omit, or fail to disclose anything we know about a property or process to which we know the answer and are not already contracted to hold confidentiality about.
If you are a client of our with a signed contract we have to present you with all offers, counteroffers, notices and communications from the other parties.
We are held to a standard of following not only the laws designed for all American citizens but also those created for REALTORS® as well.
We are responsible for getting your money into the hands of those who are meant to receive it. Often you will find yourself giving your realtor the check that is meant as a deposit, to the seller, or a payment to the broker. Your REALTOR® is responsible for making sure the monies given to them find their way to those they are intended for at the time they are needed.
Disclose everything. REALTORS must disclose everything. If you are selling your home and there is something missing from a document, your REALTOR has to disclose it not only to you, but to potential buyers. If you are negotiating with another party, you REALTOR must disclose every offer and counteroffer. If you are buying and the REALTOR knows that there is a highway about to be added to your back yard, they have to disclose it. If your realtor recommends a builder, inspector, buyer, seller, mortgage company, they must disclose if they know the other person and if they receive any money for the referral.
They must help you understand and prepare all your documents.
Although REALTORS® have extensive knowledge about real estate, they are not lawyers, builders, or accountants. If you have a question outside of their scope they are required to advise you to seek out expert advice rather than give you their opinion.
REALTORS® are to help guide you through each step of the process in order to make the transaction smooth and seamless.
Another disclosure statement. Yes we literally have to disclose everything. This one focuses on the relationship, so if your REALTOR® knows the buyer or sell, or the know the mortgage company or Loan officer, or inspector, or builder, or anyone. If your REALTOR® recommend someone to you, they need to disclose if they know them personally and also if they are being compensating for the referral.
The next section lets you know which parts of the contracts you will be signing with your REALTOR® are negotiable.
The length of the contract. Real estate contracts can not be written for more than one year, but aside from that rule, you can decided how long you want your contract to last.
The Fees you pay. Yes you can negotiate this. Just know that refusing to offer pay or offering pay below what your realtor can accept means you may not be able to use the REALTOR® you wanted to.
The scope of the your REALTORS® practices. You can ask to have certain parts of your sale stay confidential. Like maybe you don't want your neighbors selling so you ask not to have a sign in front of your house. Or maybe you don't want you home posted on social media. You can negotiate to have your REALTOR work the way you feel comfortable.
Offering broker cooperation. Again you can decided if you want your REALTOR® to offer to split their commission with the other Agent in order to make your home more appealing. You do not need to offer this. I would suggest talking to your REALTOR® about how they feel about offering broker compensation.
If you are listing a single family home you will include the zoning classification. Your REALTOR® should be able to help you find out what your properties zoning is if you are unsure.
The Real Estate Recovery Fund. This section describes what the real estate recovery fund is. This fun is here to reimburse you or anyone who has hired a REALTOR® and feels that they have been misrepresented or led fraudulently into a transaction.
The very last line before you sign this document reminds you that until you sign an agency agreement, the REALTOR® is not representing you and that you should not disclose anything to them about your financial situation. Again, this is not a contract, your Agency agreement is where the contract lies.