Serving the greater Schuylkill County region, including Pottsville, Orwigsburg, Schuylkill Haven, Lake Wynonah, Pine Grove, Minersville, Frackville, Tamaqua, Hometown, Hamburg, Hegins, New Ringgold, Deer Lake, Tower City, Tremont and Shenandoah

Agency Relationships

Every real estate licensee in the State of Pennsylvania that you meet during the course of your transaction, i.e. open houses, lifting appointments, phone calls, etc., is under a legal obligation to explain to you the various business relationships you can have with him or her, even if you choose not to work with him or her.  The explanation comes by way of a written Consumer Notice, or by an oral Consumer Notice if by telephone.  By law, the notice must be given before you start discussing your real estate needs.

Your options for a relationship are as follows:  Buyer Agency, Seller Agency, Dual Agency, Designated Agency and Transaction Licensee.

Once you have read the Consumer Notice and have made a decision to work with an agent, you will be required to reduce your relationship with him or her in writing.

If you are a seller, this will be in the form of a Listing Contract, where you define your relationship with the agent and outline the terms under which he or she will market your property, including the fee to be paid to the broker.

The Type of relationship formed between the agent and the client is called a fiduciary relationship.  A fiduciary relationship is one based on trust because the agent owes the following duties to the client:

• Loyalty
• Obedience
• Diligence
• Disclosure
• Reasonable Care

The courts strictly enforce the Agency duties so that the client can rely on the agent putting the client's interests before that of anyone else.  The courts also require that the real estate be fair and honest in all aspects of the transaction.

The source of compensation does not, in and of itself, determine Agency.  It can be paid by the buyer, seller, both or neither (subject to restrictions under applicable state law).  However, there must be informed consent as to who is paying the compensation, in writing, and in advance.

In real estate transactions, an Agency is formed between the Real Estate Broker and the client.  The client generally works with one agent who is associated with that Broker.  The client may be either a buyer or seller.

This was accomplished through a system called Sub-Agency.  The real estate company that lists the property is called the listing Broker.  The real estate company working with the buyer is called the sub-agent, or co-operating Broker because the company actually works for the listing Broker.  Although the buyer is provided service by a real estate agent, the buyer in this arrangement has no true Agency representation.

The Agency duties are owed directly to the seller in all transactions where there is no Buyer Agency.  This is true of most real estate companies in the United States.  Buyers in this arrangement must be careful not to divulge any information that they do not want the seller to know, i.e., the highest price they will pay for the property.

This system of Seller Agency has worked for many years.  However, buyers should be aware that agents are representing the sellers interest, and they should not become reliant on the agent for assistance in determining an offering price that is other than the asking price, or for any other advice that might not be in the sellers best interest.

When a buyer is represented by an agent, all the fiduciary duties are owed by the agent to the buyer and not the seller.  The buyer has the freedom to discuss the value of properties, negotiating strategies and personal finances with the agent.  The buyer can obtain the opinion of the agent concerning the condition of the property, the effect of improvements, the seller's motivation for selling, and a variety of information which a seller's agent cannot provide.

A buyer's agent will commit to make every reasonable effort to locate the property described by the buyer.  This includes searching for all homes that may be available for sale, including those not listed with a real estate company.

Although the traditional agent will work hard to find the perfect property to meet your needs, the traditional agent has some limitations because of the duties owed to their principle, the seller.

RE/MAX Five Star Realty may also form Agency relationships with buyers.  The buyer's agent is obligated to put the buyer's interests first.  One example of a Buyer Agency is an agent working with a close relative, friend, or former client.  It is easy to understand how such a buyer would expect the agent to give advice and put his/her interest first.

When a buyer, who has formed an Agency relationship with a Broker, is interested in a home listed for sale by the same broker, a Duel Agency is created.  Technically, Duel Agency arises when one broker (RE/MAX Five Star Realty( has a relationship with two clients who have opposing goals (buyer and seller).  When a Dual Agency is formed, RE/MAX Five Star Realty will notify each client.

If a Dual Agency arises, the clients and agent agree to modify the Agency relationship.  The agent must not disclose any information that would create a negotiating advantage for either client.  The agent must treat the interests of the buyer and seller equally.

Dual Agency sometimes happens - and when it does, the Agency relationship is altered.  But, everyone's goal remains the same: to buy or sell a property.