Agency Part 1 - Who’s Looking Out For You?

 

By Walt Harvey (R), ABR, CRS, GRI, SRES, ePRO

 

Have you ever visited an broker’s “Open House” and been told by the hosting agent they could get you “a better deal” if you worked through them? Beware! In Hawaii, this practice is legal, in other states it is not. Can a real estate agent realistically represent both buyer and seller in a transaction? If a seller hires the agent to sell their home with the expectation the agent will get them the best price and terms, how can that same agent also be the buyer’s advocate?

 

These issues come under the concept of “Agency” and Hawaii is one of the only states in the nation that does not have a specific, legal definition. There is no uniform definition of an agent’s duties to all parties and no uniform disclosure required. Most realty companies have a “dual-agency” disclosure that puts buyer and seller on notice that the same company represents both. If a dispute arises, a judge decides what agency means and if violations occurred. Does this adequately protect the interests of both sides?

 

In California, a real estate agent is required by law to give a “Disclosure of Agency Relationships” prior to entering into a serious discussion with a buyer or seller. The disclosure form is specific, standardized and explains the duties of the agent when representing buyer, seller or both. This disclosure is given again when an offer is made or received, and all parties must acknowledge receipt. A “dual-agency” relationship can only be created if both buyer and seller agree.

 

The good news for consumers is that The Hawaii Association of Realtors is preparing to submit an agency proposal to the Legislature. Members of HAR’s Legislative Committee have worked all summer examining similar laws in other states and are close to completing their work. An important provision of the draft version eliminates the ability of one agent to represent both buyer and seller in the same transaction.

 

Walt Harvey is a real estate broker with East Oahu Realty and works with his wife Arla. They specialize in residential, commercial and investment real estate and can be reached on their website: www.CoastalHawaii.com. Have a real estate question? E-mail us at

walt@coastalhawaii.com or call 375-8959.