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Real Estate | By Deona Colton Miller
Deona Colton Miller is a realtor
with Coldwell Banker Real Estate,
Upper St. Clair Office
1699 Washington Road
Pittsburgh, PA 15228
deona.miller@pittsburghmoves.com
Cell: 412-417-6113
Office: 412-833-5405, ext. 259
Fax: 412-833-7620.
You Deserve Representation
Did you know that until the 1990s, home buyers had no
representation at all? All realtors represented the fiduciary interests of
the seller, with either a seller’s agency agreement or, for those agents
who brought the buyers, a seller’s sub agency agreement. (Fiduciary
duties are defined by the real estate commission as Obedience,
Loyalty, Disclosure (full), Confidentiality, Accounting, and
Reasonable Care and Diligence.) In essence, since the seller was
paying the commission, loyalty was to the seller. This meant that
anything that you, as a buyer, would tell “your” agent, including
information that might affect your price negotiations, was actually
supposed to be revealed to the seller, to help fulfill the realtor’s
fiduciary responsibility to that seller under the sub-agency agreement.
There was no such thing as buyer’s representation.
Today, buyers are divided into two categories by the Real Estate
Commission: you can be a client or a customer. A buyer client
receives all the fiduciary information formerly allowed only to the
seller. As a customer, however, you are only owed limited
consideration, which does not include undivided loyalty,
confidentiality or full disclosure. As a customer, you have to put
yourself at the bottom of the list to be informed of and shown new
properties. So, how do you upgrade to become a client, instead of a
customer?
All realtors are obliged, upon a first substantive discussion (a
discussion that tells why you want to move, when you want to move,
or how much you are willing to pay), to advise the customer of their
rights as a consumer. In Pennsylvania, this is most often done by
presenting the Pennsylvania Consumer Notice, often referred to as
the “Green Sheet.” The Consumer Notice states, in bold print,
“Before you disclose any information to a licensee, be advised that
unless you select an agency relationship, the licensee is not
representing you. A business relationship of any kind will NOT be
presumed, but must be established, between the consumer and the
licensee.” Until you sign a Buyer’s Agreement, you remain a customer,
and the realtor’s fiduciary responsibility remains with the seller, even
if that realtor has never met the seller and has shown you 20 houses.
However, to become a client (and securing all those fiduciary
advantages protecting you), is easy. All you have to do is enter into a
“Buyer’s Relationship.” The advantages are simple. First, it
immediately puts you into a protected class of client. Secondly, it
discusses how the realtor will be paid in detail. Third, you can choose
the time period that you are under contract, from 1 day to 1 year,
and even after your contract expires, the realtors are bound by the
fiduciary responsibilities owed to a client.
In practical terms, here’s the difference. A potential buyer named
Mary really wants a new home, but she’s very particular and not in
any hurry. She doesn’t want to “bother” a realtor, and besides, she
might see a “for sale” by owner that she wants. She calls a realtor she
knows in her neighborhood. She also thinks that she might decide to
build if she finds a nice lot. Mary has told “her” realtor that she just
doesn’t want to sign anything, and so Mary is just a customer.
The realtor frequently has listings in the area where Mary is
looking and lists the perfect property for Mary and her family, which
was formerly a “for sale” by owner. Mary is interested in purchasing.
Had Mary been a client, the realtor would have had to tell her about
the property before it was listed. The realtor also now has the
fiduciary responsibility to tell the seller everything that Mary has
mentioned about what she wants to pay, when she wants to move, if
she’s getting a divorce or separated, or anything else that might affect
the negotiations.
Pennsylvania is one of the most advanced states when it comes to
making sure that representation is defined and provided to the
consumer. Take advantage of your rights as a buyer, and make sure
that you protect yourself with a client relationship.
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Hurdling to Victory
