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The following article was written by GBAR member and Past President of MAR, Peter Casey.

Why is protecting your real estate interests so important to home buyers and sellers?  For many folks, their home is their single largest asset and entrusting its purchase or sale to a real estate agent is a serious decision worthy of careful thought. As REALTORS® we are on the front line of homeownership. Choosing the right “agent” for your particular circumstances, and ensuring that agent understands his or her responsibilities, may prove critical to a satisfactory outcome.

 “Agent” or “Agency” is an ancient legal concept bringing with it specific duties and responsibilities attributable to both the Agent and a Principal.  Fully understanding these duties and responsibilities, and properly applying them in the everyday conduct our business, is a legal requirement. Failing to do so could result in the loss of our license to practice, or worse!    

Let’s begin with the definition of “Agency”. “Agency is defined as a fiduciary relationship between two parties in which one (the 'agent') is under the control of (is obligated to) the other (the 'principal'). The agent is authorized by the principal to perform certain acts, for and on behalf of the principal. The principal is bound by the acts of the agent, performed in carrying out entrusted duties and within the scope of agent's authority. An agency can be created by (1) express agreement, whether oral or written, (2) implication, based on the custom or practice of the trade, or (3) conduct of the principal. Under the legal doctrine of estoppel, the principal is prohibited from denying the existence of a properly constituted agency.”  (Read more at: http://www.businessdictionary.com/definition/agency.html)  

Twelve years ago, the Massachusetts Legislature and the Board of Registration of Real Estate Brokers and Salespersons modified the standards of practice for real estate professionals to require that they disclose the types of “agency relationships” available to consumers seeking to buy or sell a home (“Mandatory Licensee Consumer Relationship Disclosure”) and by expanding the possibilities for brokerage companies to represent both buyers and sellers. Fully informing our clients in advance about the relationships available to them will clarify expectations and help insure a successful transaction.  

All residential real estate transactions in Massachusetts must begin, at the first in-person meeting with a consumer to discuss a real estate transaction, with a full discussion of the types of agency relationships available to consumers as described in the “Mandatory Licensee Consumer Relationship Disclosure” form. This is not a contract; it is a formal disclosure which you will ask consumers to sign, acknowledging that you have made the disclosure. They may refuse to do sign, without consequence to them, but you should note their refusal if they do not sign.   

You and your client will choose, from among the several Licensee/Consumer relationships available, the one suitable to the transaction contemplated.  The simplest of these is defined either as Seller Agency, a relationship between a homeowner (principal) and a broker/agent hired to sell his or her home, or as Buyer Agency, the relationship between a buyer and the broker/agent hired to represent him or her to accomplish that task. In either case, you owe your clients the duties of a fiduciary, that is: honesty, accountability, undivided loyalty, obedience and reasonable care and diligence to the principal. (More on the meaning of these duties in another article.) In other words, you must always act in your clients’ best interest.  Easy to say, but not always easy to do in practice.   

 But there is more and it gets more complicated!  Massachusetts and other states have defined other relationships which you or your broker might choose to employ. You know, I am sure, that the agency relationship you and your client choose is with your broker in charge (“designated broker”), not with you, personally.  Clients pay the broker, not the agent; agents cannot accept direct compensation. The broker with whom you are affiliated shares the compensation paid to him or her with you according to your company’s policies. Some of you may be licensed brokers, as opposed to licensed salespersons, and choose to be affiliated with a designated or managing broker for convenience. Even if you are a licensed broker, so long as you affiliate with a managing or designated broker, you may not receive compensation directly, it must come through your designated broker.  

Designated brokers typically represent both buyers and sellers through their agents and, as a result, could theoretically have conflicts when, for example, a buyer client wishes to purchase a home offered for sale by that same broker. It is impossible for any broker to fully discharge his or her fiduciary duties while representing both sides of the transaction! In fairness, it is important to note that some brokers choose to represent only buyers (buyer’s brokers) or only sellers (listing brokers).  Those firms who choose to represent both buyers and sellers likely adopt a business model called “designated agency”. Here the broker “designates” one agent to represent the buyer and another to represent the seller thus allowing each agent the ability to provide the full fiduciary duties required.  An invisible barrier must exist between the agents to protect the confidentiality of both buyers and sellers. Brokers choose to operate with different business models and with different business practices; be sure you understand exactly how your company has chosen to operate.  

Ok, but what happens if you are working with a buyer and a seller interested in the same property? Well, the Massachusetts solution is a relationship called “dual agency”. This allows you to represent both parties to the transaction.  To do so you must obtain the informed written consent of both parties after providing notice to both that the situation exists. The law says: “The dual agent shall be neutral with regard to any conflicting interest of the seller and buyer.  Consequently, a dual agent cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions, which is required of a seller or buyer agent. A dual agent does, however, still owe a duty of confidentially of material information and accounting for funds.”   

That’s the law but, in my personal experience, this relationship can be difficult and confusing to both agents and consumers. I prefer to avoid this relationship but recognize that others may be very comfortable as dual agents.  In fact, some companies use a business model that purports to be dual agency only.  In the final analysis, even if you and your company choose to practice dual agency, the choice is always up to the consumer!  

Finally, Massachusetts allows for “Non-Agent Facilitators”.  This relationship requires that the “non-agent facilitator” assist a seller and/or buyer in reaching an agreement but does not represent either the buyer or the seller in the transaction.  The facilitator, and the broker with whom the facilitator is affiliated, both owe the buyer and seller a duty to present all real property honestly and accurately by disclosing known defects and owes a duty to account for funds.  Unless otherwise agreed, the facilitator has no duty to keep information received from a seller or buyer confidential.”    

At some point in a facilitator transaction, a consumer may wish to have an agency relationship with you.  You may accommodate that consumer, however, before becoming his or her agent, I strongly advise full disclosure of the circumstances to the other party to the transaction and a full explanation of how the change will affect your duties and responsibilities to each party. Keep in mind that the party you do not represent may then choose another form of representation, maybe a dual agency relationship, or they may seek to work with another agent.  Our actions have consequences.  

It is important to note that brokerages may choose from many different business models and/or office practices.  All must comply with the law regardless of which model or business practices they use.  Knowing exactly how your company operates will help you avoid conflicts with your designated broker.  One more thing to consider, the Massachusetts Statute of Frauds requires that all real estate transactions must be in writing to be enforceable. Although much work has been done either by the Commonwealth or by various Realtor® associations to provided generally accepted forms to accomplish this, it is always advisable for consumers to hire an attorney, familiar with real estate law and experienced with transactions, to represent their interests. In my twenty-five plus years in the business, 

I have never seen a standard form agreement that was not modified by attorneys to protect a client’s specific interests. Attorneys hired by a mortgage provider represent the mortgage company, not the consumer.  Remember, if you are not a licensed attorney, do not attempt to give legal advice or modify contract language!  Instead, advise your client to hire a competent attorney.   
Agency Relationships- An Agent’s Perspective
In its 2017 Remodeling Impact Report, NAR’s Research Department studied why homeowners complete outdoor projects, as well as the value these projects can bring to a home and the overall increased happiness homeowners feel upon the project’s completion.

The report highlights the impact of curb appeal factors such as lawn type, lawn care, landscaping, patios and decks, and values the return on investments for such projects. Among outdoor projects, new roofing, vinyl windows and a new garage door were ranked in the top three by REALTORS® to add value, while kitchen renovations, upgrades and bathroom renovations were listed as key remodels for home resale.

“REALTORS® understand which remodeling projects and home upgrades will bring the most value to homeowners, whether they are remodeling with the hope of impressing potential buyers, bringing in higher offers or gaining more equity in the home,” said NAR President William E. Brown, in a press release issued by NAR. “REALTORS® also understand that many of these projects are undertaken solely to get more enjoyment from spending time at home. No matter the objectives, REALTORS® have unique and invaluable insights into how renovations and remodeling will bring the most benefit to homeowners.”

NAR also released an infographic about the report.
NAR Report Identifies Interior and Outdoor Renovations That Add The Most Value
Last month, the Massachusetts Department of Public Health (DPH) updated 105 CMR 460.000 Lead Poisoning Prevention and Control. This regulation governs the statewide program for the prevention and control of childhood lead poisoning. The updated regulations are effective December 1 2017.

The new regulations lower the definition of lead poising from a blood test result of 25 ug/dl or greater to 10 ug/dl. They also lower the level considered dangerous to a child’s immediate health from between 15-24 ug/dl to 5-0 ug/dl. In addition changes were made to the lead abatement standards that would make Massachusetts more consistent with federal standards, which included making assessable surfaces intact. According to DPH the proposed changes would reduce costs by approximately one-third as an incentive for preventative deleading.   

The updated regulations were based in part on the recommendations of the Governor’s Advisory Committee for the Childhood Lead Poising Prevention Program which examined the scientific basis for updating the code.  The regulations had not been fully reviewed and updated since 2000.

In Massachusetts when a child is identified as poisoned there is mandatory code enforcement of the law including inspections and deleading, clinical case management services for the child and the property owner is liable for damages if the property in not in compliance.     
 
DPH Memo, September 13, 2017
Preventative Deleading Costs to Decline Under New DPH Regs
This year, three GBAR members have achieved life membership status. This achievement is recognized at the local association level and recognizes members for both their longevity in the real estate industry and their many volunteer contributions to the REALTOR® organization.  To attain life membership members must meet three criteria: hold a current broker or salesperson license in Massachusetts; be a member in good standing with GBREB for no less than 10 years and a member of the REATLTOR® organization for a minimum of 30 years and; have served on local association committees and in leadership roles for at least 10 years. The following members have achieved lifetime membership this year:

Russell Arico of American Hallmark REALTORS® in Arlington
Carolyn Chodat of Classic Property REALTORS® in Medway
Robert Mailey of Century 21 North Shore & O’Neil in North Reading

For those interested in applying for life membership, access this GBAR Life Membership Application
Three GBAR Members Achieve Life Member Status

At GBAR, we want to make sure you have the information and services you need, when you need them. That's why we are conducting a member needs assessment this year to get insight from our members on how we can better serve you. Feedback from this survey will be used as part of our strategic planning and budget processes for 2018 and beyond.

When you complete this survey, your name will automatically be entered into a drawing to win one of two (2) Free Annual local REALTOR® dues for 2018 (a value of $206 for agents and $380 value for broker-owners) or one of four (4) VISA® gift cards valued at $50 each.

Your input matters! To have your feedback counted, and to enter into the drawing, please complete the survey prior to the deadline of Tuesday, September 26th, at midnight.


Complete GBAR Member Needs Survey for Chance to Win Free 2018 Dues
This year’s GBAR Roadshow Conference and Expo is uniquely focused on guiding our members on the path to success. Whether you are a newer agent, or an industry veteran, our variety of session speakers will introduce fresh ideas and ways to approach the real estate business and will leave you with new strategies you can implement immediately. 

Our first session speaker is Hoss Pratt, a nationally-known authority and speaker who leads discussions on how real estate brokers and agents can supercharge their businesses. At the Roadshow, Hoss will focus on time management skills and how you can better utilize your time and existing skill set to convert prospects into clients and your fence sitters into sellers.

The second session is extremely pertinent in our market as Maura Neill, a REALTOR®, national speaker and instructor, will discuss how to run a real estate business in a low inventory market. From handling multiple offer situations to addressing the psychology of an unrealistic seller, she’ll shed light on how REALTORS® can find the path to success, even when the housing supply is low. 

Lastly, Jimmy Mackin, the co-founder of the Boston-based digital marketing company Curyator will be showcasing how REALTORS® can leverage Facebook to create lead generation and conversion. As today’s digital landscape continues to grow, creating and fostering an online presence is vital and this presentation will show you how you can use targeted ads and content on Facebook to your current, prospective and future clients and how to reap the benefits. Whether you are using Facebook, are new to Facebook or have yet to discover this powerful marketing tool, you’ll leave Jimmy’s presentation with a new understanding of how to leverage this platform to grow your business.

For more details on the GBAR Roadshow and all of our speakers, including Keynote Speaker Jean Chatzky, check out our website and sign up today!
Experts Share How to Build an Online Presence, Succeed in a Low Inventory Market
 

Education & Events

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REALTOUR - Metro Boston Region
Oct 23, 2017
Hilton Garden Inn
450 Totten Pond Rd
Waltham, MA
SRES Designation (Senior Real Estate Specialist)
Oct 24, 2017 - Oct 25, 2017
Hampton Inn
319 Speen Street
Natick, MA
REALTOUR - Central Middlesex Region (Concord, MA)
Oct 24, 2017
48 Monument Square
Concord, MA
GBAR New Member Orientation
Oct 26, 2017
Hampton Inn
319 Speen Street
Natick, MA
Real Estate Professional Ethics (Webinar)
Oct 26, 2017
Webinar
GBAR YPN And Affiliates Networking Event
Oct 26, 2017
Crowne Plaza- Violet Thorn
1360 Worcester St.
Natick, MA
Real Estate Professional Ethics -Live Classroom
Nov 10, 2017
GBAR Member Service & Training Center
68 Main Street
Reading, MA
Economic Expectations: A Forecast Of The 2018 Housing Market
Nov 16, 2017
Federal Reserve Bank
600 Atlantic Ave
Boston, MA
Residential Mortgage & Credit (Webinar)
Nov 20, 2017
Webinar
 

Calendar

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REALTOUR - Metro Boston Region
Hilton Garden Inn
9:30am
 
SRES Designation (Senior Real Estate Specialist)
Hampton Inn
8:30am
 
REALTOUR - Central Middlesex Region (Concord, MA)
48 Monument Square
9:30am
 
GBAR New Member Orientation
Hampton Inn
9:00am
 
Real Estate Professional Ethics (Webinar)
Webinar
6:00pm