Real Talk!

For many of us in the industry, it is a concern that the average John Q Public is uneducated in the transaction of real estate. Many folks think they understand- they may have bought or sold a property in their past- the trouble is that regulations are constantly changing.

Most of us, in the industry, do our best to explain the process but that two word phrase, "Multiple Representation", counts amongst the most difficult to explain. Often people get that "doe in the headlight" sort of look.

I thought it might be prudent to include here, the wording from some of the documentation that a typical Buyer or Seller would be presented with, to sign.

One of the first standard documents/brochure that every Buyer or Seller will be shown is WORKING WITH A REALTOR. It says:

3. Multiple representation
Occasionally a real estate brokerage will represent both the buyer and the seller. The buyer and seller must consent to this arrangement in writing. Under this multiple representation arrangement, the brokerage must do what is best for both the buyer and the seller. Since the brokerage’s loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a multiple representation relationship be properly documented. Representation agreements specifically describe the rights and duties of everyone involved and any limitations to those rights and duties.

On a LISTING AGREEMENT, a Seller will note the following wording:

4. REPRESENTATION: …
MULTIPLE REPRESENTATION: The Seller hereby acknowledges that the Listing Brokerage may be entering into buyer representation agreements with
buyers who may be interested in purchasing the Seller’s Property. In the event that the Listing Brokerage has entered into or enters into a buyer
representation agreement with a prospective buyer for the Seller’s Property, the Listing Brokerage will obtain the Seller’s written consent to represent both
the Seller and the buyer for the transaction at the earliest practicable opportunity and in all cases prior to any offer to purchase being submitted or
presented.
The Seller understands and acknowledges that the Listing Brokerage must be impartial when representing both the Seller and the buyer and equally
protect the interests of the Seller and buyer. The Seller understands and acknowledges that when representing both the Seller and the buyer, the Listing
Brokerage shall have a duty of full disclosure to both the Seller and the buyer, including a requirement to disclose all factual information about the
property known to the Listing Brokerage.
However, the Seller further understands and acknowledges that the Listing Brokerage shall not disclose:
• that the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;
• that the buyer may or will pay more than the offered price, unless otherwise instructed in writing by the buyer;
• the motivation of or personal information about the Seller or buyer, unless otherwise instructed in writing by the party to which the information
applies or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;
• the price the buyer should offer or the price the Seller should accept; and
• the Listing Brokerage shall not disclose to the buyer the terms of any other offer.
However, it is understood that factual market information about comparable properties and information known to the Listing Brokerage concerning
potential uses for the Property will be disclosed to both Seller and buyer to assist them to come to their own conclusions. &
MULTIPLE REPRESENTATION AND CUSTOMER SERVICE: The Seller understands and agrees that the Listing Brokerage also provides
representation and customer service to other sellers and buyers. If the Listing Brokerage represents or provides customer service to more than one seller
or buyer for the same trade, the Listing Brokerage shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all sellers
and buyers of the nature of the Listing Brokerage’s relationship to each seller and buyer.

Whereas, a Buyer, on their contract document, an Agreement called Buyer Representation, will note the inclusion of the following wording:

3. REPRESENTATION…

Multiple representation:
The Buyer hereby acknowledges The Buyer hereby acknowledges that the Brokerage may be entering into listing agreements with sellers of properties
the Buyer may be interested in buying or leasing. In the event that the Brokerage has entered into or enters into a listing agreement with the seller of a
property the Buyer may be interested in buying or leasing, the Brokerage will obtain the Buyer’s written consent to represent both the Buyer and the
seller for the transaction at the earliest practicable opportunity and in all cases prior to any offer to purchase or lease being submitted or presented.
The Buyer understands and acknowledges that the Brokerage must be impartial when representing both the Buyer and the seller and equally protect the
interests of the Buyer and the seller in the transaction. The Buyer understands and acknowledges that when representing both the Buyer and the seller,
the Brokerage shall have a duty of full disclosure to both the Buyer and the seller, including a requirement to disclose all factual information about the
property known to the Brokerage.
However, The Buyer further understands and acknowledges that the Brokerage shall not disclose:
• that the seller may or will accept less than the listed price, unless otherwise instructed in writing by the seller;
• that the Buyer may or will pay more than the offered price, unless otherwise instructed in writing by the Buyer;
• the motivation of or personal information about the Buyer or seller, unless otherwise instructed in writing by the party to which the information applies
or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;
• the price the Buyer should offer or the price the seller should accept; and
• the Brokerage shall not disclose to the Buyer the terms of any other offer.
However, it is understood that factual market information about comparable properties and information known to the Brokerage concerning potential
uses for the property will be disclosed to both Buyer and seller to assist them to come to their own conclusions.
MULTIPLE REPRESENTATION AND CUSTOMER SERVICE: The Buyer understands and agrees that the Brokerage also provides representation and
customer service to other buyers and sellers. If the Brokerage represents or provides customer service to more than one seller or buyer for the same
trade, the Brokerage shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all sellers and buyers of the nature of
the Brokerage's relationship to each seller and buyer.

Then, once a Buyer and Seller are brought together, part of the "deal" documentation includes a form entitled CONFIRMATION OF COOPERATION AND REPRESENTATION which, in the event of 'multiple agency" reads:

The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents the interests of the Seller and the Buyer, with their consent, for this transaction. The Listing Brokerage must be impartial and equally protect the interests of the Seller and the Buyer in this transaction. The Listing Broker has a full duty of disclosure to both the Seller and Buyer, including the requirement to disclose all factual information about the property known to the Listing Brokerage.

However, the Listing Brokerage shall not disclose:

-That the Seller may or will accept less than the listed price, unless other instructed in writing by the Seller;
-That the Buyer may or will pay more than the offered price, unless otherwise instructed in writing by the Buyer;
-The motivation of or personal information about the Seller or Buyer, unless otherwise instructed in writing by the party to which the information applies, or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;
-And; the Listing Brokerage shall not disclose to the Buyer the terms of any other offer.

However, it is understood that factual market information about comparable properties an information known to the Listing Brokerage concerning potential uses for the property will be disclosed to both Seller an Buyer to assist them to come to their own conclusions.

Personally, I believe that the latter verbiage (from the Confirmation of Cooperation and Representation form) explains it best, providing some outline of the responsibilities of disclosure and exceptions thereof...however, I do work with this stuff, every day.

Prospective Buyers and Sellers would be wise to review the wording and ask questions... it's wise to be informed!