A common question is “why do I need to sign a disclosure form”, hopefully this may help the public understand what disclosure in regard to a real estate transaction is about. In answer to the common question, this is why a realtor discusses disclosure with buyers and sellers and why they are presented with a disclosure form to sign.
Real estate agents and brokers are required by law to provide you with a form that discloses who they will represent in the transaction. Frequently buyers and sellers ask the question, Why do I have to sign a disclosure form? Below you can read reasons why you will be asked to sign a disclosure form.
Whatever type of agency relationship you and your salesperson choose to work with, you have the following rights and responsibilities in selling or buying or renting property:
A Disclosure Statement form will be presented to you before you are shown properties or discuss your financial ability to purchase or lease the property.
Although you will be asked to sign the disclosure form acknowledging that it was given to you, it is not contract and does not obligate you to work with the agent who is presenting the disclosure form to you. It simply serves as consumer disclosure form to protect your interests. And to inform you of your choices.
The “Agency Disclosure Statement” helps you understand the role of the Real estate agent and or the broker in your real estate transaction. It is also intended to help you understand the role of other agents who may be involved in the transaction.
Real estate agents are obligated by law to treat all parties to a real estate transaction honestly and fairly.
They must exercise reasonable care and diligence and maintain the confidentiality of their clients. They must never discriminate in the offering of properties; they must promptly present each written offer or counter offer to the other party; and they must answer questions truthfully.
Real estate agents must disclose all material facts that they know or should know relating to a property. An agent’s duty to maintain confidentiality does not apply to the disclosure of material facts about a property.
All agreements with real estate agents should be in writing and should explain the duties and obligations of the agent. The agent should explain how the agent will be paid and any fee sharing agreements with other agents.
A Real Estate agent can represent both the buyer and seller. Dual Agency can only be performed with informed consent in writing by both parties involved.
A buyer or seller should carefully consider the consequences of dual agency or dual agency with designated sales agents before agreeing to such representation. When acting as a dual agent the salesperson cannot provide the full range of fiduciary duties to the buyer or seller.
You have the responsibility to protect your own interests. You should carefully read all agreements to make sure they accurately reflect your understanding.
A real estate agent is qualified to advise you on real estate matters only. If you need legal or tax advice, it is your responsibility to consult a licensed attorney or accountant.
WHAT THE ABOVE INFORMATION SIMPLY MEANS IN PLAIN terms:
Sounds too complicated?? The law states clearly that agent must disclose their agency affiliation or relationship with consumers. If they are employed by the seller of the home that you wish to see, they ALREADY have a contract in writing to represent the seller.
If they are showing you other agent’s listings and the other agents have a contract with the seller, then the agent you are working with will be working as a Brokers agent. Although they will still represent the seller they do not have direct contact with the seller, they are called the Brokers agent.
This is of course unless you and your agent decide to work together with buyer agency, then a contract may be executed and the agent will represent you solely. This must be decided before homes are shown. When agents work as buyer’s representatives they must disclose that fact to all the sellers and listing realtors prior to showing homes.
If you need more information regarding agency disclosure go to the National Association of Realtors web site. You can also get more information from the New York State Association of Realtors site. And the Department of State.
I hope you found this information helpful.
Some of this information has been taken from the NATIONAL ASSOCIATION OF REALTORS® website Field Guide to Agency Disclosure NAR’s Information Central & the DOS disclosure form. Click here Agency disclosure form to view a disclosure form.