Agency Relationship In Real Estate Transactions

MINNESOTA LAW REQUIRES that early in any relationship, real estate brokers or salespersons discuss with consumer what type of agency representation or relationship they desire (Agency Relationship In Real Estate Transactions). If you should desire representation, you must enter into a written contract according to state law ( Exclusive Right To Sell Listing Contract or Contract For Exclusive Right to Represent Buyer). Until such time as you choose to enter into a written contract for representation, you will be treated as a customer and will not receive any representation from the broker or salesperson. The broker or salesperson will be acting as a Facilitator (see below), unless the broker or salesperson is representing another party.

A brief description of the types of Agency Relationships in Minnesota are listed below:

SELLERS BROKER: A broker who lists a property, or salesperson who is licensed to the listing broker, represents the Seller and acts on behalf of the Seller. A Seller’s broker owes to the seller the fiduciary duties (see below). The broker must also disclose to the Buyer material facts as defined in Minnesota Statutes, section 82.197, subdivision 6, of which the broker is aware that could adversely and significantly affect the Buyers use or enjoyment of the property. If a broker or salesperson working with a Buyer as a customer is representing the Seller, he or she must act in the Seller’s best interest and must tell the Seller any information disclosed to him or her, except confidential information acquired in a facilitator relationship (see below). In that case, the Buyer will not be represented and will not receive advice and counsel from the broker or salesperson.

SUBAGENT: A broker or salesperson who is working with a Buyer but represents the Seller. In this case, the Buyer is the broker’s customer and is not represented by the broker. If a broker or salesperson working with a Buyer as a customer is representing the Seller, he or she must act in the Seller’s best interest and must tell the Seller any information disclosed to him or her, except confidential information acquired in a facilitator relationship (see below). In that case, the Buyer will not be represented and will not receive advice and counsel from the broker or salesperson.

Buyers Broker: A Buyer may enter into an agreement for the broker or salesperson to represent and to act on behalf of the Buyer. The broker may represent the Buyer only and not the Seller, even if he or she is being paid in whole or part by the Seller. A Buyer’s broker owes to the Buyer the fiduciary duties (see below). The broker must disclose to the Buyer material facts as defined in Minnesota Statutes, section 82.197, subdivision 6, of which the broker is aware that could adversely and significantly affect the Buyers use or enjoyment of the property. If a broker or salesperson working with a Seller as a customer is representing the Buyer, he or she must act in the Buyer’s best interest and must tell the Buyer any information disclosed to him or her, except confidential information acquired in a facilitator relationship (see below). In that case, the Seller will not be represented and will not receive advice and counsel from the broker or salesperson.

DUEL AGENT – Broker Representing both Buyer and Seller: Duel agency occurs when one broker or salesperson represents both parties to a transaction, or when two salespersons licensed to the same broker each represent a party to the transaction. Duel agency requires the informed consent of all parties, and means that the broker and salesperson owe the same duties to the Seller and Buyer. This role limits the level of representation the broker and salesperson can provide, and prohibits them from acting exclusively for either party. In a duel agency, confidential information about price, terms and motivation for pursuing a transaction will be kept confidential unless one party instructs the broker or salesperson in writing to disclose specific information about him or her. Other information will be shared. Duel agents may not advocate for one party to the detriment of the other.

Within the limitations described above, duel agents owe both Seller and Buyer the fiduciary duties (see below). The broker must disclose to the Buyer material facts as defined in Minnesota Statutes, section 82.197, subdivision 6, of which the broker is aware that could adversely and significantly affect the Buyers use or enjoyment of the property.

FACILITATOR: A broker or salesperson who performs services for a Buyer, a Seller, or both but does not represent either in a fiduciary capacity as a Buyer’s Broker, Seller’s Broker or Duel Agent. THE FACILITATOR BROKER OR SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY DUTIES LISTED BELOW, EXCEPT CONFIDENTIALITY, UNLESS THOSE DUTIES ARE INCLUDED IN A WRITTEN FACILITATOR SERVICE AGREEMENT. The facilitator broker or salesperson owes the duty of confidentiality to the party but owes no other duty to the party except those duties required by law or contained in a written facilitator service agreement, if any. In the event a facilitator broker or salesperson, working with a Buyer, shows a property listed by a facilitator broker or salesperson, then the facilitator broker or salesperson must act as the Sellers broker. In the event a facilitator broker or salesperson, working with a Seller, accepts a showing of the property by a Buyer being represented by the facilitator broker or salesperson, then the facilitator broker or salesperson must act as a Buyers Broker.

The fiduciary duties mentioned above are listed below and have the following meanings:

Loyalty - broker/salesperson will act only in a client(s) best interest.

Obedience - broker/salesperson will carry out all client(s) lawful instructions.

Disclosure - broker/salesperson will disclose to client(s) all material facts of which broker/salesperson has knowledge which might reasonably affect the client’s rights and interests.

Confidentiality – broker/salesperson will keep client(s) confidences unless required by law to disclose specific information (such as disclosure of material facts to Buyer).

Reasonable Care – broker/salesperson will use reasonable care in performing duties as an agent.

Accounting – broker/salesperson will account to client(s) for all client(s) money and property received as an agent.

Realty Executives Alexandria Home Sales
Alexandria MN 56308
320-763-4255
Fax: 320-763-4383
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Information in deemed reliable but not guaranteed