Representation

Today, I would like to talk to you about  Agency Relationships in Florida and how YOU can CHOOSE be represented. 

The legal default agency relationship in Florida is as a Transaction Broker with a duty to the transaction. Because it's the legal default, nobody has to tell you about it, you're just supposed to know...Transaction brokerage under various names is practiced in 17 states, but only in Florida is it not disclosed to customers.  “Florida law helps perpetuate the erroneous, widespread belief that most transaction brokers work as totally loyal representatives not just as facilitators, let's delve into this further.

In Florida, it is against the law for a Realtor to represent a Buyer and Seller in the same transaction as a fiduciary.  A fiduciary duty, also known as obedience, loyalty and confidentiality, cannot be provided to more than one party in a transaction in Florida…in fact, it can really never be provided even in states that allow it if you think about it. It creates a relationship whereby I'm working in your best interests to the detrimate of the other party and I can't really do that for both sides...I like to beat up the other party. I want to work in the best interests of MY client.

Let's say I have listed a property for sale, and a buyer comes along who wants to put in an offer, and asks me what they should offer, or what the seller would accept, should I be allowed to tell them?  What about if the seller then asks me if they should counteroffer, and how much?  Should I be allowed to tell them what I’ve been told by the buyer?  My answer to all of those questions is an emphatic NO!

Florida consumers “generally assume that their agents are working exclusively for them...in a transaction brokerage relationship that is untrue.

This does not mean a Florida Realtor cannot handle the transaction for both the buyer and the seller.  Florida has created an agency relationship called transaction broker which is actually the default agency relationship if you have not specifically entered into single agency (more on that later).

In the transaction broker capacity, the Realtor is working for the transaction, but has not entered into a fiduciary relationship with either party. This means the Realtor is a neutral party between the buyer and seller. However, by definition, the Realtor owes both parties limited confidentiality. That means they are not allowed to tell the seller that the buyer will offer more or tell the buyer that the seller will take less without prior permission from all parties.

Here are the legally required duties for a Single Agent vs.Transaction Broker relationship:

SINGLE AGENCY

TRANSACTION BROKER

Dealing honestly and fairlyDealing honestly and fairly
Loyalty 
Full ConfidentialityLimited Confidentiality
Obedience 
 
Accounting for all fundsAccounting for all funds
Skill, care, and diligence in the transactionSkill, care, and diligence in the transaction
Presenting all offers and counteroffers
in a timely manner
Presenting all offers and counteroffers
in a timely manner
Disclosing all known facts
that materially affect the value
of residential real property
and are not readily observable
Disclosing all known facts
that materially affect the value
of residential real property
and are not readily observable

VERY IMPORTANT: Notice that “Loyalty”, “Obedience”, and “Full Disclosure” are NOT duties of the transaction broker and, perhaps most importantly, only “Limited Confidentiality” is owed by the transaction broker relationship!

Keep in mind that the lack of “Full Disclosure” does not mean the transaction broker can hide anything from you, only that they are not obligated to tell you everything……such as how much the seller or accept, or how much the buyer will pay. 

The Transaction Broker Relationship Disclosure form states the following just before listing the duties above: “A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent”

So if you were to have your choice on how to be represented what would you choose? Everyone I have talked to always wants the representation of the single agency relationship, because that person is working in your best interests. 


Does this cost anything extra to you? No. It's just a relationship we need to establish at the beginning when we have our consultation appointment and have it in writing. Call me on my cell at 352.232.9107

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