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Exclusive Buyer Agents

Exclusive Buyer Agents

As a consumer planning to purchase a home in Massachusetts, be clear on the role you want your real estate professional to perform and confirm that he or she meets your expected role. The terminology is confusing and the clarity of what a term means gets murkier by the minute: dual agency, exclusive buyer agents, buyer brokers, buyer advocates. As the below article highlights, legislation for MA real estate is unlikely to protect the consumer in making the terminology clear and consistent. As this article concludes, buyer beware. MABA buyer agents offer the buyer the peace of mind of knowing that their buyer agent is committed to serving only their needs. There is no risk of conflict of interest.

Responsibilities of a Fiduciary

Exclusive Buyer Agents 2Professor Charles E. Rounds, Jr., professor of law at Suffolk University in Boston and author of LORING: A Trustee's Handbook, presented at a semi-annual meeting of the Massachusetts Association of Buyer Agents (MABA). In his presentation "Demystifying the Rights, Duties and Responsibilities of a Fiduciary", Rounds covered the legal rights and responsibilities of the parties in a real estate transaction.

Rounds told the members that the duties of a fiduciary require "full, absolute disclosure, undivided loyalty, and absolute confidentiality."

Addressing 'Agency' in a legal context, Rounds explained that the Common Law has five facets: property, contract, agency, trust and tort. The Common Law is distinguished from law created by the enactment of legislatures. It comprises "the body of those principles and rules of action, relating to the government and security of persons and property, which derive their authority solely from usages and customs of immemorial antiquity, or from the judgments and decrees of the courts recognizing, affirming, and enforcing such usages and customs; and, in this sense, particularly the ancient unwritten law of England. 1 Kent. Comm. 492"

The agent is exempt from undivided loyalty when:

  • Duties are ministerial (that is non-discretionary).
  • When there has been full and fair disclosure and informed consent. (Consider though - can there ever be informed consent when the client is unrepresented by independent counsel?)
  • When a court tolerates divided loyalty in the face of no actual injury (that is, the court abrogates the "no further inquiry rule" and adopts a facts and circumstances test as those in the designated agency movement essentially advocate.)
  • When there is permissive legislation (for example, Chapter 339, Missouri, effective 9/1/97).

Citing Missouri's designated agency legislation, Rounds said the bottom line is that no amount of legislation can erase all of the applicable common law. A court, for example, most likely always will have to fall back on common law principles when adjudicating what constitutes 'informed consent,' 'confidential information,' and 'ministerial acts.'

The common law proscriptions against fraud, deceit, and misrepresentation will always be with us as well. In the end, it is unlikely that "dual agency" legislation with all its disingenuousness will accomplish much. If anything, it fosters confusion by sowing the landscape with jargon, e.g. "designated broker," "limited agency," and "transaction brokerage relationship."

Rounds ended his presentation by stating that in the real estate industry, everyone who is breaching fiduciary duties is liable and open to lawsuit. To "abrogate the common law" is a dangerous situation. Rounds said that legislative changes are simply authorizing the appearance of impropriety. In the Commonwealth of Massachusetts, there are inherent conflicts in the way most real estate "agents" appear to be doing business. It is still a 'caveat emptor' - buyer beware - situation.

Reprinted with permission from the International Real Estate Digest, c 2000, www.ired.com

 
 
 

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  • Closed Home Sales Down in April After Record Inventory Lows and Rising Prices

    Median Sales Prices Have Seen Year-Over-Year Increases for 19 Straight Months

    WALTHAM, Mass. – May 23, 2017 – The Massachusetts Association of Realtors® (MAR) reported today that low inventory and rising prices caught up to the spring market, with single-family home sales decreasing over eight percent from this time last year. Both single-family and condominium prices saw a hike. Condominium sales decreased almost 10 percent from April 2016.

    April Closed Sales:

    Single-Family April 2017 April 2016 %Change
    Sales 3,735 4,082 -8.5%
    Median Price $362,500 $349,900 +3.6%
    • Closed sales have been down for four out of the last 12 months
    • Median prices have been up or flat for 16 out of the last 17 months
    Condominium April 2017 April 2016 %Change
    Sales 1,455 1,607 -9.5%
    Median Price $345,000 $329,950 +4.6%
    • Closed sales have been down for four out of the last 12 months
    • Median prices have been up or flat for 16 out of the last 17 months

    “With the current trend of plunging inventory and rising prices, the odds were strong that sales increases of the winter market would be unsustainable through the spring,” said 2017 MAR President Paul Yorkis, president of Patriot Real Estate in Medway. “The demand is there; we just need more homes on the market to satisfy that demand.”

    Inventory and Days on Market:

    Single-Family April 2017 April 2016 %Change
    Inventory 13,234 19,392 -31.8%
    Months of Supply 2.7 4.0 -32.5%
    Days on Market 81 107 -24.3%
    New Listings 7,706 8,513 -9.5%
    • 62nd time in the last 63 months of year-over-year inventory decreases
    Condominium April 2017 April 2016 %Change
    Inventory 1,455 1,607 -9.5%
    Months of Supply 2.0 2.8 -28.6%
    Days on Market 60 78 -23.1%
    New Listings 2,640 2,971 -11.1%
    • Inventory down for 16 out of the last 17 months

    “Unfortunately, our existing level of inventory makes it hard for us to meet our current and future housing needs,” said Yorkis. “If we don’t do anything soon, it will have a negative impact on the entire Massachusetts economy.”

    If you are thinking of buying a home anywhere in the state of Massachusetts, it is in your best interest to work with a member of the Massachusetts Association of Buyer Agents. These men and women are dedicated to working exclusively on your behalf to ensure that you have the best possible home-buying experience. Find a MABA agent here.