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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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  • Massachusetts Pending Home Sales and Median Price Up Again in June

    The Massachusetts Association of Realtors® (MAR) reported today that single-family pending home sales were up over nine percent in June from last year. Pending condominium sales were also up more than 12 percent. The median price for both single-family homes and condos saw a hike, with the single-family median price rising over the $400,000 mark. Realtors® confidence both in the market and in home prices dipped slightly in June. This month’s “Hot Topic” question finds that the majority of Realtors® surveyed have had at least one transaction that was an all-cash deal (i.e. no mortgage involved) since the beginning of the year.

    June Pending Sales: 

    Single Family June 2017 June2016 % Change
    Sales 6,723 6,128 9.7%
    Median Price $410,000 $380,000 7.9%
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    Condominium June2017 June2016 % Change
    Sales 2,596 2,307 12.5%
    Median Price $370,000 $349,900 2.9%
    • Pending sales have been up or flat 20 of the last 22 months 

    “The increase in homes put under agreement this month may be a positive sign for a spring market that has suffered plummeting inventory,” said 2017 MAR President Paul Yorkis, president of Patriot Real Estate in Medway. “However, median prices have continued to rise, which can push some buyers out of the market.”

     
    Realtor® Market and Price Confidence Indexes: 

    Confidence Index June2017 June2016 %Change
    Market 80.73 80.97 -0.29%
    Price 71.79 73.87 -2.82%
    • The Realtor® Market Confidence Index went down for the first time in 27 months
    • The Realtor® Price Confidence Index went down for the first time in six months
    • Measured on a 100-point scale, a score of 50 is the midpoint between a “strong” (100 points) and a “weak” (0 points) market condition  

    “The Realtor® Market Confidence Index has dipped year-over-year for the first time in over two years, indicating that Realtors® are growing concerned about some of their buyers being able to succeed in this market,” said Yorkis. “However, both indexes reveal that ultimately Realtors® remain positive. We just need to see more inventory to keep up with the demand.”

    With home inventory being as tight as it is, you want to give yourself every advantage if you are thinking of buying a home in Massachusetts. For the best possible experience, be sure to work with an agent who is a member of the Massachusetts Association of Buyer Agents.