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No Agency – The Ugly
No Agency in New Construction and Re-sale Homes
Working with a realtor who declares that he is not your agent means he is working for the seller ONLY.
No Agency means that you are totally on your own, without much legal protection from the Seller or their Agents.
Undivided Loyalty: Listing or Seller Agents have a legal document holding them responsible to obtain the best terms and price, in favor of the Seller, this is referred to as Undivided Loyalty. Their duty of disclosure is limited to the Sellers signed statements plus the realtor’s responsibility to provide any details of latent defects that usually can not be seen visually. Otherwise it is Buyer beware. The Sellers Realtor must provide you with accurate honest answers to your questions, but is not obligated to disclose anything else.
No agency often puts purchasers at a disadvantage. In No Agency you are on your own in determining value, without assistance in researching the sales history of the home, or the full history of every other similar property. You are on your own to investigate every legal aspect of the property as well as any building inspections. It is likely that you will sign off on subject clauses stating you have consulted with legal and financial experts so no errors can ever be the responsibility of the Seller or their Realtor.
The form Working With a Realtor is simply an acknowledgement that the four Agency types have been explained to you, this is mandatory by all real estate companies; You sign it and it protects the realtor if you ever say he did not explain his obligations to you.
NO AGENCY by the book
You may choose to use the services of a REALTOR® without having any kind of agency relationship. This might occur, for example, when you are being shown a property by the seller/landlords agent.
The Agent in this manner has a legal and ethical duty to provide you with accurate, honest answers to your questions. Explain real estate terms and practices and provide forms. They can inform you of lenders and their policies, identify and estimate transaction costs, and can assist you in establishing your range of affordability. They must prepare offers or counter-offers at your direction and present them. But that is it; the realtor must maintain undivided loyalty to the Seller.
You are otherwise wide open to make as many errors as you want; the realtor is not responsible for you. Even expensive lawyers and accounts could not help you. Run Away as quick as you can.
Find a realtor that has a great reputation and track record and work in a Buyer Agency relationship to protect yourself. Work together to negotiate the lowest price and the best terms.
When you are represented in Buyers Agency, Realtors must provide undivided loyalty to you only. They must protect their buyer clients negotiating position, disclose all known facts which may affect or influence their clients decisions, also Buyers Realtors have a legal obligation to keep the confidences of their clients.
Be aware if you are not in a Buyer Agency relationship the realtors are working for the sellers.