The Maryland Association of Realtors has issued a new brochure for the public entitled “Get to Know the Role of Real Estate Agents”. The brochure covers the role of agents and agency relationships and is a useful tool for the public as significant changes occurred to Agency Law in Maryland real estate as of October 1, 2016.
There are three kinds of agency relationships in Maryland: Seller Agency, Buyer Agency, and Dual Agency. The brochure explains that the role of an agent has been defined over the years by law and by custom and until 1999 real estate agents generally worked for sellers. Thus, buyers were typically considered “customers” and the real estate agent was obligated to get the best deal for the seller. As the industry changed, more and more homebuyers wanted to have an agent working for them, so buyer representation became the norm.
The brochure explains the following differences:
- A Client is a buyer or seller who has entered into a written agency agreement and is represented by an Agent. The Agent provides advice and also owes the Client duties of reasonable care, loyalty, disclosure, confidentiality, diligence and accounting.
- A Customer is a buyer or seller who has not entered into a written agency agreement and is not represented by an Agent. A Customer must be treated honestly and fairly and Agents must disclose material adverse facts known to the Agent.
Seller Agency is the “traditional” Agency relationship where the listing agent represents the seller under a written Listing Agreement and owes the Seller duties of reasonable care, loyalty, disclosure, confidentiality, diligence and accounting.
Subagency is another type of Seller Agency where the seller authorizes the listing company to extend the Agency relationship outside the company and its Agents. Subagency allows real estate Agents from other companies to show the home to buyer Customers, meaning, buyers who have not entered into a written Buyer Agency agreement. So, simply put, if you are a buyer and you do not enter into a written Buyer Agency agreement with your real estate agent, your real estate agent is working as a Subagent. And, in this scenario, the listing Agent and Subagent both represent the seller, while the buyer remains unrepresented.
As specified above, Buyer Agency is created through a written Buyer Representation Agreement, and the Buyer Agent owes the buyer the duties of reasonable care, loyalty, disclosure, confidentiality, diligence and accounting. Additionally, the Buyer Agent should disclose any material facts or information about the property, which are reasonably known to the Buyer Agent.
Dual agency is also covered in the brochure in detail. The brochure is available for download by visiting MAR’s website at www.mdrealtor.org.
Lauren Bunting is a licensed Associate Broker with Bunting Realty, Inc. in Berlin, MD.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
