What should I do if I’m representing a seller and an unrepresented buyer who does not want to be represented approaches me about the property?
To meet the requirements of Section 1101.558 of The Real Estate License Act, you will need to disclose either orally or in writing who you represent at first contact with the buyer. Of course, it will be easier to prove you’ve provided this disclosure if it’s in writing. You’ll also need to provide the buyer with the Information About Brokerage Servicesform upon first substantive communication regarding a property.
If an unrepresented buyer presents an offer on a home where you represent the seller, the buyer is a customer—not a client—and intermediary rules do not apply to the situation. A broker acts as an intermediary when representing the buyer and the seller in the same transaction.
You need to quit saying represent the buyer and the seller. You can’t represent both parties. Quit using the word represent (a fiduciary) and just say “work with the buyer and the seller” and define exactly what that phrase means. Attorneys may not represent opposing parties and we should not be allowed to either. As a TAR attorney once said: “Intermediary is a legal fiction.”
Is the Agent in this case not a fiduciary to his seller? I believe he is.
I agree. I do not do intermediary. I represent the seller, but tell customers they should get their own agent if they wish to be represented as well. If they say they don’t want to, I tell them they will be customers and although representing the seller. I am obliged to share anything with the seller, but our TAR standards require honesty and high ethics to both our clients and customers.
You’d have a point but you’re not licensed.
***Always speak to your broker and follow your brokerage policy, many brokerages do not allow this situation.
Many other states, our neighbors in New Mexico included, have gotten away from “representing” either party. The Broker is a Facilitator in the transaction, and it works very well. ~When is Texas going to figure that out?? Licensees in NM don’t call themselves “agents” for a very good reason. They are all brokers, and very rarely do they represent anybody. Ask yourself if your Mortgage Broker actually “represents” the buyer? Does a Pawn Broker “represent” the buyer ? So why can’t Real Estate Brokers assist the buyer and the seller in a transaction without acting like they own some legal… Read more »
Why not be represented? Please explain. I want to understand why. I fully represent all my clients and I wouldn’t do it any other way. To me representation matters.
Agent and broker mean two different things in Texas real estate. A broker must have at least 5 years experience in various types of real estate transaction and take an exam to obtain a broker’s license. An agent can just pass the sales associate exam and work their way up to become an experienced broker if they so desire. Agents may or may not have the drive to become a broker therefore will not have the experience. Since New Mexico wants to call all agents “brokers”, it would give the wrong impression to consumer to believe NM “brokers” have the… Read more »
These topics could create a good discussion among Realtors, if anyone were reading them… Many of the posts from Texas Realtors are very good, and many of our fellow Realtors need to read the discussion that can ensue from said stimulating topics. …But the format of this page does Not promote that. …It says to click on a button if you want to “Comment on this Post”. …99 out of 100 Realtors are not going to think that they want to “comment” on any of these posts. But if they knew they could read the thread of the comments that… Read more »
If it is very clear I am representing the seller, what jeopardy does it put me in if I draft and negotiate the purchase agreement between buyer and seller? Can I stipulate from that point the buyer has to pay for any representation they bring in on their behalf moving forward? Some brokers have non-represented buyer agreements for the buyer to sign in addition to the IABS. Could that be considered practicing law without a license?
I’ve wondered that. Some brokers have drafted letters or forms for people to sign, and I’ve wondered if that can be considered practicing law.
Good point. I’m curious to know the answer as well.
Anyone has thoughts on this? I want to know as well.
I know la ocal realtor that does both size like 40% of the time!! He’s Been doing it for many many years. I guess he’s been lucky.
They aren’t saying you can’t help both sides; you just have to disclose the client loyalties to the unrepresented party. You can also negotiate the contract for both while not representing either party, while acting as an intermediary. That situation must also be disclosed with the intermediary notice.
As long as a Broker/Agent is disclosing properly and NOT disclosing information that will help or hurt the other side, there should be no issue working with both buyer and seller.
Use TXR 1417 Representation Disclosure in addition to the Information About Brokerage Services to clarify that you represent the Seller. Have that unrepresented customer sign it and keep it in your file. Then assist the buyer customer but refrain from offering opinions and advice. You can help the buyer as long as you don’t advise the buyer to do something that would disadvantage the seller. Use multiple choices with the buyers.
I’m not certain that anyone reading or commenting on this thread can talk (have dialogue) to unrepresented Buyers and/or Sellers without something they say being alleged, construed and concluded by TREC or attorneys as giving opinions or advice…
Well stated and expressed with great clarity and without too much jargon too.
It is my understanding that the buyer at this point can only be a “customer” not a “client” since you represent the seller. Having a Buyer Representation Agreement with a Buyer makes them a “client” therefore creating dual agency in Texas which is illegal….. The “Intermediary Form” is used to inform the “customer” that they are either not represented OR that they will be assigned an agent to represent them as appointed by the Broker, therefore making them a “client” and the Broker the Intermediary. That being said, why would you risk it! I personally have never felt comfortable doing… Read more »
Disclose, Disclose, Disclose if this comes up. I have had buyers that do not want to be represented for whatever reason. It’s mostly a belief (that is not true) that they can save money by doing this. I ALWAYS explain and provide the IABS form to make sure they understand completely that buying a property costs them nothing if they are unrepresented or represented, but being represented is better as it is like an attorney that only looks out for their interests. If they still want to be unrepresented, then I make a note of this under special provisions in… Read more »
At that point wouldn’t your seller the “client” turn into a customer?
Someone already said what I was thinking about using the word “representing” in the last sentence. I was trying to find a nice way to say that it was stated incorrectly. We can’t represent the buyer and seller in the same transaction, but we can work with them both in the same transaction under an intermediary relationship. Even if it wasn’t illegal, it would be like acting as a double agent against both parties. I know what was meant, but it is confusing to new agents.
I tell the Buyers that want me to show the Listing that they need to get their own Agenrt! I will not work with them and I do not want to meet them. I represent the SELLER. I do answer any questions that I am able to. Most of them understand. My Sellers understand this also and are good with it. Less LIABILITY for the Seller!!!!
If you represent the SELLER you would consider all potential buyers. If a buyer wants to represent themselves, they should be able to. Open the door to the house, no need to answer questions. If you discard a potential buyer you are not working at the SELLERS best interested. It’s your duty to find a buyer for the property, whether unrepresented or not.
I think as long as you explain to the buyer that you don’t represent them (you represent the seller) but you can present an offer for them as long as they sign the appropriate docs saying you understand this then you should be ok. Obviously you have to be honest and ethical throughout the transaction. In many cases these transactions go smoother than when working with other agents (which is often why they don’t want to work with another agent – a previous bad experience).
License holders need to “watch what they say” so as not to “imply” any representation with a buyer who thinks they would not like representation. Our human-ness often overwhelms our brains, and we say things we shouldn’t, like “I can help you with this”. (add a large groan here). Please talk to your broker and get some training!!!!
This scenario is best put this way. Let me give you an example. As an investor, I would prefer to buy distressed properties unrepresented with a much lower than retail offer. I would ideally do this unrepresented and allow the brokerage (if their policies allow it) to keep both ends of the commission. This is known as designated agency and is legal in Texas while dual agency is not. I already assume your fiduciary rights to your seller but maybe your seller has an urgency to sell and this is sometimes the best option. With that said, if you have… Read more »
Buyer stated on contract he was not represented but in reality he had a licensed broker working on the side (she works for a real estate agency) friend doing the paperwork. Is this legal ? Did it need to be disclosed ?