Step 2: Disclosures + Agreements
Disclosures + Agreements
In this step, we'll discuss the disclosures and buyer agreement you'll need to review and sign before buying your home!
Disclosure Regarding Real Estate Agency Relationships
During your initial encounter or meeting with an agent, you will be asked to sign a Disclosure Regarding Real Estate Agency Relationships form.
This form is required in the state of Michigan (and most other states!). Before you disclose any confidential information, this form is required to be presented and signed by both you and me. If an agent doesn’t require this of you, they are not acting within the law. I may ask you to sign this using a digital platform via Dotloop or if we’re meeting in person, I’ll have a copy to sign.
It’s important to remember that this disclosure is not a contract and doesn’t mean you must work with me. This form is required by law to disclose what type of agency relationship I have with any potential buyers or sellers before they discuss any confidential information with me.
There are 4 types of agency relationships:
Seller’s Agent:
A seller's agent, under a listing agreement with the seller, acts solely on behalf of the seller. A seller can authorize a seller's agent to work with subagents, buyer's agents and/or transaction coordinators. A subagent is one who has agreed to work with the listing agent, and who, like the listing agent, acts solely on behalf of the seller. Seller's agents and subagents will disclose to the seller known information about the buyer which may be used to the benefit of the seller.
Buyer’s Agent:
A buyer's agent, under a buyer's agency agreement with the buyer, acts solely on behalf of the buyer. Buyer's agents and subagents will disclose to the buyer known information about the seller which may be used to benefit the buyer.
3. Dual Agent:
A real estate licensee can be the agent of both the seller and the buyer in a transaction, but only with the knowledge and informed consent, in writing, of both the seller and the buyer. In such a dual agency situation, the licensee will not be able to disclose all known information to either the seller or the buyer. The obligations of a dual agent are subject to any specific provisions set forth in any agreement between the dual agent, the seller, and the buyer.
4. Transaction Coordinator:
A transaction coordinator is a licensee who is not acting as an agent of either the seller or the buyer, yet is providing services to complete a real estate transaction. The transaction coordinator is not an agent for either party and therefore owes no fiduciary duty to either party. The transactional coordinator is not the advocate of either party and therefore has no obligation to negotiate for either party.
The Buyer’s Agency Agreement
The next document I will go over with you is the Buyer’s Agency Agreement. In Michigan, I don’t legally represent you or your interests unless I have an agency agreement in place. In fact, all Realtors®, by default, represent the seller at the beginning of each transaction whether they are hired by the seller or not. In order to change the agency relationship, a Buyer’s Agency Agreement is necessary.
The Buyer’s Agency Agreement outlines the responsibilities of the buyer and Realtor® and establishes an agency relationship. In exchange for fully representing the buyer, the buyer is agreeing to only use that specific Realtor® if they decide to purchase a home.
The Agreement can be negotiated for a specific time period, price point, address, geographical area or any other terms the parties agree on.
Is the Agreement required?
No, not technically required but without one I do not represent you as a buyer. Having a signed agreement with me is important for getting the most out of our time together and ensuring that I am fully representing you and your best interests throughout the home buying process. Don't worry, if you're not happy with my service, I won't keep the agreement as leverage. But by having this agreement, I can make the most of my efforts and expertise to help you.
If you already have an agreement in place with another Realtor®, please be upfront and honest about that with others so there is no confusion. Agents are not allowed to interfere with other agency relationships, and not disclosing can be messy for all involved.
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Ready to connect? Reach out! I look forward to helping you on this journey!
Monique Hanson is a REALTOR® serving the greater West Michigan area. Monique helps people buy and sell homes in Kent, Muskegon, and Ottawa Counties. You can contact Monique by calling or texting 616-805-9177 or emailing hello@moniquehanson.com.