Minnesota Agency Relationships in Real Estate Transactions
Early in any sort of real estate relationship between a potential home buyer or seller and a real estate professional, the state law is that the agent must disclose where their loyalties lie and who they represent. By default, any agent working with a home buyer or seller without a signed contract is a facilitator of that potential client. They are facilitating the potential client by showing them properties, preparing a CMA, or giving them advice. Please note that while working in this role the only duty a real estate professional is mandated to give the potential client is confidentiality. Other fiduciary duties may be laid out by state law or specific terminology in a Facilitator Services Agreement. The other mandated fiduciary duties of loyalty, obedience, disclosure, reasonable care, and accounting are only obtained through hiring a real estate professional with a specific contract.
The other four forms of real estate relationships break down as follows:
Seller's Broker - The real estate professional AND EVERYONE LICENSED AGENT WITH SAME COMPANY that has a home listed for sale. For example: Jim Schaaf is the managing broker for Edina Realty in St Cloud MN. If he has a home listed for sale, I am by default a Seller's Broker mandated to look out for that seller's best interests. This is regardless to whether or not I know the seller's intimately or what their situation entails.
Sub-Agent - A person who is working with the buyer, but represents the seller. This is not very widely used in Minnesota because who would want to have someone help them purchase a home knowing full well that they are representing the other party?
Buyer's Broker - This role is when a potential home buyer signs into contract with a real estate professional to represent their best interests in the purchase of a home. This is generally a free service provided to home buyers, but there are scenarios when a potential home buyer may have to provide payment for the real estate professionals services. Definitely ask your potential real estate professional what these circumstances may be before you sign into contract with them.
Dual Agency - When a real estate professional represents both the buyer and the seller in a given real estate transaction. When you are filing out a contract with a real estate professional to represent you, make sure they go into detail how they approach this situation if it presents itself. It can be very difficult to represent both involved parties to a given real estate transaction without a specific set of guidelines that the real estate agent plans to follow. To view the entire Minnesota form regarding real estate relationships, click on the following link: http://stcloudedina.com/blog/2007/11/minnesota_disclosure_form_for.html
Feel free to post your questions, comments or concerns here for answers and review.
Jason Tangen, GRI - Broker Associate
Edina Realty St Cloud
www.StCloudEdina.com - REAL ANSWERS for REAL ESTATE in St Cloud MN
