A rarely investigated subject by most buyers and sellers of residential real estate in South Florida is what role their realtor is playing in the transaction. By Florida Statute, there are three different roles that a realtor may play in a real estate deal. Whether you are buying or selling home, it is important to understand what capacity your realtor is acting in.
In Florida, a realtor may act as a single agent, a transaction broker, or maintain a “no representation status”. Most realtors in Miami-Dade and Broward County are acting as transaction brokers. In fact, and while it may come as a surprise, it is presumed that your realtor is acting as a transaction broker unless agreed to in writing otherwise. A transaction broker is in essence working to close the transaction and is not in a fiduciary relationship with their client. “Fiduciary” means that the broker is “in a relationship of trust and confidence” with the buyer or seller, has the duty of loyalty, confidentiality, obedience, full disclosure, and accounting, and also the duty to use skill, care, and diligence.
Realtors Acting As A Transaction Broker
Pursuant to statute, a transaction broker provides “limited representation to a buyer, a seller, or both … but does not represent either in a fiduciary capacity or as a single agent.” The transaction broker is working as a facilitator between the buyer and seller to close the transaction and does not owe an undivided loyalty to either party. Nonetheless, the transaction broker must, among other things, account for all funds, use skill, care, and diligence in the transaction, deal honestly and fairly with the parties, and disclose all known facts that materially affect the value of residential property that are not readily observable to the buyer. In addition, the transaction broker is prohibited from disclosing either party’s true “bottom line” regarding price negotiations or financing terms, the motivation of either party, and other matters that either party requests be kept confidential.
Realtors Acting As A Single Agent
A single agent realtor is a broker who represents either the buyer or the seller, but not both, and is a fiduciary to either the buyer or seller. The single agent status can only be created in writing. During this fiduciary relationship, the broker is under a duty to avoid becoming interested in the transaction and to avoid taking a position adverse to the principal.
Realtors Without A Brokerage Relationship
The third relationship you may have with a realtor is a “no brokerage relationship”. In that case, the realtor is only licensee must deal honestly and fairly with the customer, disclose all known facts that materially affect the value of the residential property if they are not readily observable, and account for all funds entrusted to the licensee. A “no brokerage” relationship must be established in writing to avoid the statutory presumption of transaction broker.
The Value of Engaging an Experienced Real Estate Lawyer
If you are like most people, the purchase or sale of a home is one the biggest transactions that you will ever enter into. While it is possible to buy or sell real estate in Miami-Dade and Broward County without a real estate lawyer, it is always advisable to hire an experienced real estate lawyer before entering into your transaction. For a nominal charge, an experienced real estate lawyer can review your purchase and sale contract, investigate zoning and land use issues, and negotiate your best price. Moreover, in marked contrast to a transactional realtor’s obligations, real estate lawyers are always required to act as your fiduciary and have your best interests in mind.
If you have questions and are looking for answers to legal issues in Miami-Dade or Broward County, contact Jordan + Pascale, P.L. at 305-501-2836 or visit us at JordanPascale.com.