Perhaps the most confusing issue in a real estate transaction to a buyer or seller is the term Agency. This confusion has caused many transactions years ago to end in litigation in the Courts.
A buyer would think the Real Estate Agent was representing him in the transaction only to discover that the Agent was only representing one party, either the buyer or seller. The other confusion centered around who paid the real estate commission. The real estate commission was paid by the seller even though the buyer had his own real estate agent. Really confusing!
The Louisiana Real Estate Commission decided to clarify the issue by having the buyer and seller sign Agency Agreements. If a Real Estate Agent was to represent the seller and could also work with a buyer, to sell the property, the seller must give his permission to the Agent at the time the property was listed.
The buyer must also give his permission to the Agent to act as a Dual Agent representing both him and the seller. Forms were developed for both the buyer and seller to sign, informing them of what Dual Agency is and granting the Agent the right and authority to act as a Dual Agent.
The Agent owed both the buyer and seller Fiduciary Representation. Acting as a Fiduciary Agent meant the Agent was to act in the best interest of both parties. If the seller said to the Agent, I am listing the property for sale for $100,000 but I would take $80,000 the Agent could not disclose this to the buyer.
If the buyer said I am offering only $75,000 but I would raise the offer to $90,000 if I had to, the Agentcannot disclose this to the seller. To do so in either example would be to violate the Agent’s Fiduciaryresponsibility and create a legal liability.
Dual Agency is practiced much more in commercial real estate due to the complicated transactions and the specialized agreements required in a transaction.
On the Local Scene
THE SURGE to be located on Mane Street, West Monroe has placed a “Coming Soon” sign on the property. There has been some question about the development since no work has begun. This large family recreation center will feature a variety of activities.
The APARTMENT COMPLEX at 1710-1714 S. 6th Street, Monroe has sold for $412,500. The 13 apartment units sold for $31,700 per unit.
Bill Roark is a Commercial Associate Broker at Tri State Properties and may be contacted by email to email@example.com.