What is a Statutory Broker? And Dual Agent? Huh?

13 03 2011

There are a LOT of ways a Realtor can be involved in a transaction.

The common sense ways are either a buyers agent, or a seller agent.  The duties here are probably fairly obvious…follow the law, do your best to get what your client wants, be honest & forthcoming about any adverse material facts.

Dual agency isn’t even that uncommon.  If you do choose this, be sure you have a good solid relationship with your agent & you truly trust them.  It’s NOT acceptable to talk about if the buyer is willing to pay more, the seller is willing to accept less, anything asked to be kept confidential (in writing), or factors motivating either party to buy or sell (this one can be disclosed, if both parties agree).  Basically, the Realtor can be the “go between” and provide statistical data to both parties to help them make the best informed decision & talk about potential pros/cons.

The type of agent that is most “unheard of”/uncommon/confusing is the Statutory Broker.  What on earth?  Sounds like something that happens with people who go out with someone under 18 & have a little too much fun, right?  This has NOTHING to do with that…promise.

When a buyer elects to have an agent, who is not already employed as a sellers agent, act as their agent, BUT they don’t want any advice/input, etc….they really just want an agent who will provide the proper paperwork & make the right appointments to get things to closing…..THAT is in essence a statutory broker.  Now…my question is, why on earth would you ask for that, when there is generally no fee for having a buyers agent & then you get the knowledge & experience you expect.  Your agent is fiduciarily (yep…pretty sure I just made up a new word) bound to you if you have a buyer/broker agreement.  Why not do that?  I’m not saying a statutory broker has no responsibility (fiduciary or otherwise), but it’s different, as we can see here.

Well….I think I’ve done a pretty good job of muddying the waters now.  Whew.  If you have questions, I can show you the “Relationships in Real Estates Transactions” form that the Montana Association of Realtors® uses.  It’s two pages, but quite defined….it talks about all forms of agency, just like I did, but in much more specific & technical terms.  🙂

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