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Dual Agency Alive and Well in New Hampshire

March 4, 2007 by

Dual Agency Rule change effective May 1 2007

The New Hampshire Real Estate Commission recently approved rule changes that go into effect on May 1 2007.  These changes now bring the Rules (REA) in line with the Law and as some of you know changes to the law (RSA) 331-A:25-d Disclosed Dual Agent;Duties were approved in 2005 and since that time the “Rules” really didn’t make any sense.

Many agents seem to be a little confused by the difference between RSA’s (Laws) and the REA’s (Rules)…what is what…and which one do you listen to? Now that won’t be a problem any more but to clarify I have always considered the Law (RSA’s)to be like your car’s owners manual…full of advice on what Must be done and the Rules (REA’s) to be like the operators manual...telling you How to do what must be done. Make sense?

Our Rules will now coincide with our Law!

The biggest change is to REA 701.01 Agency and Non Agency Disclosure and Rea 404.4 Brokerage Contracts

REA 701.01
(a) A licensee shall provide a written agency relationship disclosure to the consumer at the time of first business meeting.
(b) A licensee showing a property listed with another agency shall disclose their agency or non-agency relationship verbally or in writing to the other party’s agent prior to showing the property and in the writing at time of the offer.
(c) Licensees shall use the agency/non-agency disclosure form adopted by the commission (as of this writing they are still developing the form that we all will have to use)
(f) A licensee intending to act in the capacity of a dual agent shall:

(1) At the time of first meeting with a consumer to discuss a specific property, provide a written agency relationship disclosure pursuant to Rea 701 .01(a);
(2) On the listing contract and buyer agency/tenant representation contract, give the client the option to accept or deny a dual agency statement of consent to showings, pursuant to Rea 404.04;
(3) have the informed consent to dual agency agreement  signed and reviewed  by the buyer/tenant and seller/landlord at the time which in the dual agency occurs but no later than the preparation of a written offer for sale or lease pursuant to Rea 404.04

Changes to Rea 404.4 Brokerage Contracts as of May 1 2007 will now require that listing agreement and buyer agency agreements have consent for dual agency showings within the agreement by separate dated signatures.

Caution...You must be sure to gain Informed written consent at time of listing for potential Dual Agency showings and then be sure to get the actual consent form signed prior to drafting an offer for sale or lease of real estate.

Best Practice…Make sure you have (1.) signed consent for showings on the listing agreement and then (2.) Contact your seller client and inform them that a dual agency showing is taking place and try to get written consent…if unable to get written consent…make sure you get it before you present or draft an offer and make sure your buyer client understands what dual agency really means.

These changes are more in line with how we actually do business in NH but if not handled correctly the agent has more rope to hang themselves with in my opinion.
Need a refresher on what dual agency in New Hampshire is check out my blog post called Dual Agency Life in the Fast Lane

The New Hampshire Association of REALTORS will be adding new forms to our True Forms (forms on line) once we get final approval from the Board of Directors that will reflect these changes.

A listing of the forms pending approval are;

The Revised Forms will include:

CONDITIONAL RELEASE FROM EXCLUSIVE LISTING AGREEMENT

CONDITIONAL RELEASE FROM EXCLUSIVE BUYER AGENCY AGREEMENT

DUAL AGENCY INFORMED CONSENT AGREEMENT

EXCLUSIVE AGENCY AGREEMENT

EXCLUSIVE BUYER AGENCY AGREEMENT

EXCLUSIVE LISTING AGREEMENT

PROPERTY DISCLOSURE – LAND

PROPERTY DISCLOSURE – RESIDENTIAL ONLY

PURCHASE AND SALES AGREEMENT AND DEPOSIT RECEIPT

 

Brand Spanking New Forms will be:

BUYER AGENCY DISCLOSURE

SELLERS SUITABLE HOUSING ADDENDUM TO PURCHASE AND SALES AGREEMENT AND DEPOSIT RECEIPT

 

I’m sure we’ll all have a bit of a learning curve to go through but these forms will make it easier for all of us.

 

Jay and Monika McGillicuddy

Prudential Verani Realty

Hampstead NH
603-548-7728

Dual Agency Rule change effective May 1 2007

The New Hampshire Real Estate Commission recently approved rule changes that go into effect on May 1 2007.  These changes now bring the Rules (REA) in line with the Law and as some of you know changes to the law (RSA) 331-A:25-d Disclosed Dual Agent;Duties were approved in 2005 and since that time the “Rules” really didn’t make any sense.

Many agents seem to be a little confused by the difference between RSA’s (Laws) and the REA’s (Rules)…what is what…and which one do you listen to? Now that won’t be a problem any more but to clarify I have always considered the Law (RSA’s)to be like your car’s owners manual…full of advice on what Must be done and the Rules (REA’s) to be like the operators manual...telling you How to do what must be done. Make sense?

Our Rules will now coincide with our Law!

The biggest change is to REA 701.01 Agency and Non Agency Disclosure and Rea 404.4 Brokerage Contracts

REA 701.01
(a) A licensee shall provide a written agency relationship disclosure to the consumer at the time of first business meeting.
(b) A licensee showing a property listed with another agency shall disclose their agency or non-agency relationship verbally or in writing to the other party’s agent prior to showing the property and in the writing at time of the offer.
(c) Licensees shall use the agency/non-agency disclosure form adopted by the commission (as of this writing they are still developing the form that we all will have to use)
(f) A licensee intending to act in the capacity of a dual agent shall:

(1) At the time of first meeting with a consumer to discuss a specific property, provide a written agency relationship disclosure pursuant to Rea 701 .01(a);
(2) On the listing contract and buyer agency/tenant representation contract, give the client the option to accept or deny a dual agency statement of consent to showings, pursuant to Rea 404.04;
(3) have the informed consent to dual agency agreement  signed and reviewed  by the buyer/tenant and seller/landlord at the time which in the dual agency occurs but no later than the preparation of a written offer for sale or lease pursuant to Rea 404.04

Changes to Rea 404.4 Brokerage Contracts as of May 1 2007 will now require that listing agreement and buyer agency agreements have consent for dual agency showings within the agreement by separate dated signatures.

Caution...You must be sure to gain Informed written consent at time of listing for potential Dual Agency showings and then be sure to get the actual consent form signed prior to drafting an offer for sale or lease of real estate.

Best Practice…Make sure you have (1.) signed consent for showings on the listing agreement and then (2.) Contact your seller client and inform them that a dual agency showing is taking place and try to get written consent…if unable to get written consent…make sure you get it before you present or draft an offer and make sure your buyer client understands what dual agency really means.

These changes are more in line with how we actually do business in NH but if not handled correctly the agent has more rope to hang themselves with in my opinion.
Need a refresher on what dual agency in New Hampshire is check out my blog post called Dual Agency Life in the Fast Lane

The New Hampshire Association of REALTORS will be adding new forms to our True Forms (forms on line) once we get final approval from the Board of Directors that will reflect these changes.

A listing of the forms pending approval are;

The Revised Forms will include:
CONDITIONAL RELEASE FROM EXCLUSIVE LISTING AGREEMENT

CONDITIONAL RELEASE FROM EXCLUSIVE BUYER AGENCY AGREEMENT

DUAL AGENCY INFORMED CONSENT AGREEMENT

EXCLUSIVE AGENCY AGREEMENT

EXCLUSIVE BUYER AGENCY AGREEMENT

EXCLUSIVE LISTING AGREEMENT

PROPERTY DISCLOSURE – LAND

PROPERTY DISCLOSURE – RESIDENTIAL ONLY

PURCHASE AND SALES AGREEMENT AND DEPOSIT RECEIPT

Brand Spanking New Forms will be:

BUYER AGENCY DISCLOSURE

SELLERS SUITABLE HOUSING ADDENDUM TO PURCHASE AND SALES AGREEMENT AND DEPOSIT RECEIPT

I’m sure we’ll all have a bit of a learning curve to go through but these forms will make it easier for all of us.

Jay and Monika McGillicuddy

Prudential Verani Realty

Hampstead NH
603-548-7728

Filed Under: Agency Q&A Tagged With: , , , ,

Dual Agency Life in the Fast Lane

December 22, 2006 by

Dual Agency Life in the Fast Lane…whoa…gotta slow down a bit.

Understanding what Disclosed Dual Agency is and is not is crucial in today’s ever changing real estate market.

In a previous blog I talked about Reasonable Care one of the Fiduciary Duties a REALTOR® owes to their clients.  I explained that the easiest way for me to memorize the fiduciary duties I owe my clients is this way…OLD CAR.
                                  O…Obedience
                                   L…Loyalty

                                   D…Disclosure,full

                                   C…Confidentiality

                                   A…Accounting

                                 R…Reasonable Care and Diligence

I also learned to memorize what is compromised or limited in a dual agency situation, remember that Dual Agency is legal in many states including New Hampshire, I know it may not be so in your state but up here it is.
In fact in New Hampshire rather than joining the states that have banned or made the practice of disclosed dual agency illegal, N.H., has recently taken on changes that once approved would in fact make dual agency much easier to practice…much more in line with common practice.
Good -Bad or Indifferent…Disclosed Dual Agency, I think… is here to stay at least in New Hampshire.  Which is why a good solid understanding of Dual Agency is a must both for the consumer and the real estate agent.
So lets look at it this way and hopefully this help you understand or be able to better explain it to your clients.
What is compromised or limited in Disclosed Dual Agency is the OLD part of old-car…Obedience, Loyalty and Disclosure.
O…Obedience, Lawful Obedience You can’t be 100% obedient an example would be that The Sellers instruct you to negotiate the highest price possible and the Buyers also instruct you to negotiate the lowest price. This is clearly conflicting instructions of which you can not obey.
L…Loyalty You can’t be 100% loyal as you now have two clients and you can not do anything to or for one that would put the other client at a disadvantage…imagine yourself walking a Razor Sharp Tight Rope as NAR’s legal council Laurie Janik once put it…one wrong move and you fall off. Or better yet imagine having 2 children both who you love equally and must protect equally even if one needs your protection more than the other…you can not advocate for the weakest child more so than the strongest one. Equal Care no matter what…this can be extremely difficult to do.
D…Disclosure,full This One is very hard…the best example I’ve ever heard is…You list a home, your sellers are your friends, you’ve known them a long time. They fall on hard times..job loss, illness and may lose the house and have not a penny to spare.

You have been working with buyers who are clients, you like them very much and they have become good friends.
Suddenly the buyers financial situation changes and they can increase the price limits and now want to look at your listing.
After getting informed consent from all parties you put the transaction together as a dual agent…all is fine till the home inspection.  You attend it and can’t help but hear the inspector point out several items needing repair and you clearly hear the buyers say things like “No problem, I can fix that” or “No problem my brother is a contractor and he can fix that…I can get that done at cost” and “I’m handy that’s a piece of cake for me to fix” all in all a pretty good inspection and later when the sellers ask how it went..you tell them only that it seemed to go well, but until the report comes back and the buyers sign off you really don’t know.

Then the Buyers bring you THE LIST, the demands for repair or price adjustments to the tune of $25,000…your sellers cry when hearing this..they are devastated and need your guidance …and you know that your buyers really don’t need 25k and can do the repairs themselves for a lot less money than they are asking for…  Suddenly the words Obedience, Loyalty, Disclosure and Confidentiality take on a whole new meaning!

Not only for the agent but for the consumer as well.

Remember…The CAR part of Old-car…remains unchanged in a dual agency situation.

C…Confidentiality…You still owe 100% Confidentiality
A…Accounting…You still have to account for all funds and for the property
R…Reasonable Care and Diligence…You still have the obligation of protecting the client and that includes making sure they understand the limitations of the dual agency situation.
Dual Agency is not easy and is not at all pretty. When you really think about it, it is most assuredly the hardest form of agency to practice and one full of hidden traps and with the most liability to the agent…a recent NH case resulted in a judgment in excess of $120,000…OUCH!!!
Dual Agency can be practiced successfully but only with Full Informed Disclosure and Consent in writing given by competent buyers and sellers and most importantly COMPETENT agents.

Jay and Monika McGillicuddy

Monika McGillicuddy

Serving Southern New Hampshire and Rockingham County

Monika McGillicuddy Real Estate Training Website

NH Real Estate Blogs

Prudential Verani Realty

Hampstead NH Real Estate

603-548-7728

Filed Under: Agency Q&A Tagged With: , ,