Real Estate
Agency in Illinois
There are some very
important issues you need to understand before we get
started, actually before you get started with any agent.
The first being something called Agency.
Will anyone
represent you in your transaction? Who? Before
you disclose any confidential information to any agent that
could impact your negotiation position you need to be told
by the agent at your first significant contact who they will
be, or are, representing, or if they are performing "ministerial"
duties (answering very general questions, etc. and no
agency relationship is created), and their office's
policy for Agency Representation options, etc. You'll
also be asked to sign an acknowledgement for your file and
the agents compliance files.
Generally speaking,
in Illinois, the agent represents the person they are
working with as their legally designated agent, unless you
have an agreement otherwise. This is Designated
Agency. Your legal agent owes you certain
fiduciary-like statutory duties such as confidentiality,
promoting your best interests, exercising reasonable skill
and care.
This arrangement is
with the real estate brokerage, who will designate one or
more agents to be your legally designated agent, unless
another type of arrangement is agreed to in writing.
Buyers
Agent - Typically, the buyer and the brokerage
company will enter into a written brokerage agreement that
identifies your legal designated agent, either exclusive or
non-exclusive, give a specific ending date and time, and
will outline the responsibilities of each party to the
other.
It's important to
note that agents working with the same brokerage company may
be the legal agent of other buyers competing to buy the same
property you're interested in, or representing the seller
from whom you buy your property. The only agent owing
you statutory duties are those designated as your legal
agent and no other sales associate with that company.
An example would
be: a property comes on the market - your legal agent has 2
buyers who might be interested - you and another
buyer-client (because an agent usually represents more than
one buyer or one seller at a time), another agent from your
agents office also has a buyer interested in the same
property, and another real estate office has an interested
buyer. Let's say all four make an offer to the seller.
All offers are
presented fairly and honestly to the seller. The
seller weighs each offer on its own merit - the
qualifications and readiness of the buyer (cash buyer,
mortgage loan pre-approved or pre-qualified, property to
sell, other contingencies, etc.), the price and terms, etc.
The seller decides what they want to do with each offer.
All buyers who made offers are given the sellers response.
Another type of
agency is when both the seller and buyer in a transaction
are represented by the same legal agent. This is
allowed only with your consent and you'll be provided with a
form explaining dual agency and
given an opportunity to accept or decline should the
situation arise.
If you have agreed
and a dual agent situation
develops you'll be asked to confirm your prior consent
before entering into a contract for the purchase or sale of
the property. A dual agency transaction places some
limitations on the legal agent, who is bound by
confidentiality to both parties, when negotiating price and
terms.
For example: I have
a property listed for sale and a buyer-client wants to make
an offer on it. Both my seller-client and buyer-client
have previously consented to allow me to be a dual agent.
The way I handle this situation is to have my buyer-client
sign a confirmation form allowing the dual agency, once
agreed to in writing, we proceed to draft their offer.
Once the offer is completed and signed by the buyers, I
contact my seller-client to let them know I have an offer
I'd like to present as soon as possible.
Once I'm
face-to-face with my seller-client, I have them sign the
confirmation form allowing the dual agency. After they
have signed it, I proceed to let them know the details of my
buyer-clients offer. The seller-client has three
options: accept the offer as written, counter any part of
it, or reject it entirely.
Once this is
completed I meet with my buyer-client and let them know the
seller-clients decisions. If the buyer-clients offer
was not accepted as originally written by the seller-client,
then my buyer-client has to decide what they want to do: 1)
to accept the seller-client changes for the offer; 2) to
counter the seller-clients counter-offer; 3) or reject the
seller-client's changes and withdraw/cancel their offer.
Negotiations keep
going until we either reach an agreement, the offer is
cancelled at the choice of either client, and within the
parameters of the offer (time limitations, etc).
Being a dual agent
does have some restrictions. At no time can or will I
suggest a price to offer, accept, or counter with to either
client or disclose confidential information. I have to
be fair and honest with both clients. For example: if
I know my seller-client is really desperate to sell, let's
say because of job transfer and they need to be at their new
location pronto, or if my buyer-client absolutely loves the
property and is willing to pay the seller-client a gazillion
dollars for it - well, I can't disclose anything that has
the potential to give either client an advantage over the
other. With your written, specific direction though: I
can disclose to the buyer-client you need to sell/move as
quickly as possible; I can disclose to the seller-client
your love of the property and will do whatever it takes to
become the new owner.
Sellers
Agent - when you sign a listing contract there is a
place to name your legal designated agent(s) or sales
associate(s). All other sale associates, even with the
same real estate brokerage company, do not represent you.
Only the associate(s) on your listing contract.
Regardless of your
representation choice, everyone has a mutual goal and the
real estate broker is trying to assist you in the sale or
purchase of real estate upon terms acceptable to all
parties.
