Buyers Customer Relations Legal News Selling/Listing

Does a transaction broker represent the transaction or the person?

A common phrase attorneys on Florida Realtors Legal Hotline hear is that a licensee “represents the transaction” when working with a buyer, seller or both in a transaction broker relationship. This isn’t technically correct because a transaction broker provides a limited form of representation to a person, unless they’re providing services to both sides and provide a limited form of representation to both.

The title of transaction broker refers to a list of required legal duties the licensee will owe. It may help understand the transaction broker relationship by looking at the required duties a transaction broker would owe in relation to the others.

There are currently three types of relationships a licensee can form when meeting a party. See below for a chart that organizes these relationships from the fewest legal duties to most.

These relationships move from no brokerage relationship (fewest required duties), to transaction broker (additional required duties), to single agent (most required duties).

No Brokerage Relationship

Duties owed

  1. Dealing honestly and fairly
  2. Disclosing all known facts that materially affect the value of residential real property which are not readily observable to the buyer
  3. Accounting for all funds entrusted to licensee

How established

By providing a written copy of the no brokerage relationship notice disclosure located at Fla.Stat. §475.278(4)(c) to the party before showing property.

Transaction Broker Relationship

Duties owed

  1. Dealing honestly and fairly
  2. Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer
  3. Accounting for all funds
  4. Using skill, care, and diligence in the transaction
  5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
  6. Limited confidentiality unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential
  7. Any additional duties that are mutually agreed to with a party

How established

It is presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer. Fla.Stat. §475.278(1)(b).

Single Agent Relationship

Duties owed

  1. Dealing honestly and fairly
  2. Disclosing all known facts that materially affect the value of residential real property and are not readily observable
  3. Accounting for all funds
  4. Skill, care, and diligence in the transaction
  5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
  6. Confidentiality
  7. Loyalty
  8. Obedience
  9. Full disclosure

How established

By providing a written copy of the single agent notice located at Fla.Stat. §475.278(3)(c) to the party before, or at the time of, entering into a listing agreement or an agreement for representation or before the showing of property, whichever occurs first.

Original Source

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