What Buyers Should Know About North Carolina Agency Law
What many potential buyers in North Carolina do not know is that upon first substantial contact every single real estate broker should present them with the Working With Real Estate Agents Brochure. Â This is a mandate from the North Carolina Real Estate Commission. This is our governing body here in North Carolina and not negotiable. To briefly outline the brochure it is designed to familiarize the potential buyer with the types of agency agreements that are allowed in North Carolina. As we all know real estate laws can be different from state to state. So this is North Carolina’s way to educate the consumer.
Buyer’s Agency is an agreement between a firm and the client with that one particular broker acting as their agent. The Buyer’s Agent is to always promote your best interests, obey all lawful instructions, provide you with all the lawful facts that could in anyway influence your decision, basically this is a fiduciary relationship where we as agents for the buyer are to always act in your best interest and keep everything about you confidential. Now one thing most prospective clients do not realize is that until you have an agreement with that broker you should not tell them anything about your financial position as in how much you can afford or how much you want to spend. For they do not work for you until you have an agreement with them written or oral.
Seller’s Agency is much like the buyer’s agency agreement in that we have the same type of fiduciary relationship with the seller. We are to always look out for your best interest and follow all lawful instructions. The one fact to be careful of is that when you are a buyer speaking with a Seller’s Agent you must be careful not to divulge any financial information that may compromise one’s negotiating position. The person driving you around and looking at properties may very well be a sub-agent of the Sellers. Until they fully disclose to you that they are a Buyer’s agent then they more than likely work for the Seller. If they are showing you their own listings their fiduciary to the the Seller.
Dual Agency is allowed in North Carolina. Now dual agency can occur with a single agent as well as a firm. Dual agency has to be approved by both buyer and seller when it happens. When a dual agent is a single agent then they are to perform their duties to the full extent that they can. But since they cannot divulge any information of their clients they are reduced to handling all the paperwork and not advising either side since they have prior knowledge of the finances of both sides. Now a firm can also be in dual agency if both the buyer and seller work for the same firm. There can also be designated Dual Agency when both the buyer and seller are represented by agents in the same firm but the broker in charge appoints or “designates” an agent to the representative for one of the clients if there is the possibility of a conflict of interest or as the commission spells out so that the designated agent can more fully represent their clients.
It is best to work with firms that are Exclusive Buyer Agents. You need to ask about their accreditation and if they are anyone working in their firm has active listings agreements.
North Carolina is very much a Caveat Emptor state. The standard contract, disclosures, etc. are weighted to the benefit of the Seller. Make sure you are working with an Exclusive Buyer Broker that has your best interests at heart.