Michigan Agency Disclosure Law
Before you Disclose know your Rights...
Whether you're looking for a home, condo or vacant land in Macomb or Oakland County, you should know about Michigan Agency Disclosure Laws and how they can effect you.
Before viewing a home that is listed with a real estate agent you should be told about the Agency Disclosure laws and who the agent will be representing.
The information below explains the history of agency disclosure and what you need to know. So before you set an appointment to view a home or show your home...be sure you know Who the agent will be representing. Same for open houses and calling the listing agent?
History of Michigan Agency Disclosure
In Michigan, prior to January of 1994, real estate agents represented sellers as seller agents and sub-agents. As an agent whether you were working with a buyer showing them houses or with a seller helping them sell their home, you represented the seller. Consequentially, many buyers disclosed confidential information, that worked in the sellers best interest because buyers had no one representing them.
With the passing of the new Agency Disclosure Law, as real estate agents we then entered into contracts with our buyers, the same way we did with a seller. Now buyers and sellers could have someone representing them.
Know the Law?
Did you Know that Article 25 339.2517 of the occupational code for real estate brokers and salesperson's, licensed in the state of Michigan, specifically outlines a real estate agents duties regarding Agency Disclosure. It even states they are subject to penalties. So be an informed Buyer and ask the agent showing you homes about the Agency Disclosure. View section 2517 of the occupational code.
It's important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transaction. Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company.
- Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
- Buyer's representative (also known as a buyers agent). A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest through out the transaction and owes fiduciary duties to the buyer. In Macomb County this fee is typically paid by the seller through the listing broker. But the buyer can pay the licensee directly through a negotiated fee.
- Disclosed dual agent Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them is legal in most states.
- Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
- Non-agency (called, among other things, a transaction broker or facilitator). Some states permit a real estate licensee to have a type of non agency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in non agency non-agency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
In this market you need a real estate agent by your side at all times. Do you have one or are your going it alone?