The real estate industry is preparing for some “practice changes” in mid-August following the National Association of Realtors settlement agreement in the Burnett/Spitzer class action lawsuit.
One of the main changes the 100-plus page agreement calls for is the use of written buyer agency agreements to be used throughout the country, whereas previously only about a quarter of states were using the practice in state mandates. However, Maryland was one of those states and has been requiring the use of written buyer agency agreements since Oct. 1, 2016.
This key provision of the settlement agreement requires that all Realtors representing buyers enter into a written brokerage agreement before touring a home, but agents in Maryland should already be very comfortable with this practice.
The Maryland Real Estate Commission advises the following as to the timing of when the buyer agency agreement should be in effect: “Before you provide any real estate brokerage services you must have a written and signed brokerage agreement in place.”
The real estate commission’s guidance is consistent with the Maryland Real Estate Brokers Act, which defines “provide real estate brokerage services” as engaging in any of the following activities:
• For consideration, providing for selling, buying, exchanging, or leasing any real estate; or collecting rent for the use of any real estate
• For consideration, assisting another person to locate or obtain for purchase or lease any residential real estate.
Maryland law allows a licensed agent to show a property to an unrepresented buyer, but they are required to use the “Understanding Whom Real Estate Agents Represent” form in that situation. This document clearly establishes that you do not represent the buyer, and it shows the buyer you are either working as a seller’s agent or a sub agent.
Also important to note, using the Understanding Whom Real Estate Agents Represent form does not provide the buyer with the benefit of representation or create a fiduciary relationship, nor does it set forth any agreement as to if and in what amount the real estate agent will be paid.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
