The new "Agency
Disclosure" law (effective Nov. 25, 1999) affects the way real estate is
practiced in Pennsylvania.
The purpose of
the new law is to help consumers by clarifying, up front and in writing, who works
for whom in a real estate transaction, thereby making consumers more knowledgeable
about what service options are available to them. Pennsylvania joins 47
other states in clarifying agency relationships between consumers and real estate
The law is beneficial because it requires
a clear and timely disclosure in the form of a written Consumer Notice that a
consumer receives during the initial meeting with the real estate agent.
This notice enables buyers, sellers, lessors and lessees to make informed decisions.
the new law, all licensed real estate professionals (licensees) may serve consumers
through the following relationships:
Seller Agency -
the licensee works only for the seller, owing the seller client loyalty, confidentiality
and a good faith effort to find a buyer for the property.
Agency - the licensee works only for the buyer, owing the buyer client
loyalty, confidentiality and a good faith effort to find a property for the buyer.
Dual Agency - the licensee acts as the agent for both the
seller and the buyer in the same transaction, with the consent of all parties.
Real estate companies have buyer and seller clients; it is not possible to predict
when a buyer client will choose to buy a property from a seller client.
this may put the agent in the middle, it does assure that sellers have the greatest
exposure for their properties and that buyers can make selections from the entire
market. A dual agent must provide services fairly, without promoting either
party's interests over the other.
Designated Agency -
created for the in-house transaction where both buyer and seller are represented
by individual agents in the same company. It allows the agent selected by
the buyer to continue representing the buyer's interest while the agent selected
by the seller continues to represent the seller's interests. This allows
the consumers to retain the services they sought when choosing real estate agents
to advocate for them.
Transaction Licensee - the licensee
provides communication, document preparation services, or similar real estate
related services without being an agent or advocate for either the seller or the
A transaction licensee could not disclose the
fact that the seller will accept a price less than the asking price, or that the
buyer will pay a higher price than the amount offered. A transaction licensee
may not disclose any information deemed confidential by the consumer.
consumer seeking real estate services will be asked to sign the Consumer
Notice that outlines their options for representation.
requesting this form, a real estate professional is doing his job and fulfilling
the requirements of the law. Even if you are attending open houses, you
will be asked to sign the form.
The Consumer Notice
is not a contract and does not commit the consumer to any specific relationship.
You are required to sign this form at the first meeting with the agent in order
to help you make informed decisions and to reduce the potential for confusion
later in the transaction.
Once you select the relationship
that best meets your needs, you will sign another for granting permission for
such a relationship. This form will detail the duties owed to you within
the chosen type of relationship.
The advantages to
the consumer of the new law include the following:
understanding for whom the licensees work in a transaction
of the licensee's role and responsibilities in a real estate transaction
of the duties real estate licensees owe to consumers
that certain information appear, in writing, in seller buyer contracts
with questions should contact their real estate agent, or visit the Pennsylvania
Association of Realtors website at www.parealtor.org.
Lancaster County of Realtors represents more than 1,100 members involved in all
aspects of the real estate industry, is one of more than 1,800 local associations
nationwide which comprise the National Association of Realtors.
article was taken from the December 9, 1999 Real Estate Weekly
the Consumer Notice in PDF format.
In order to view the Consumer Notice,
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