The following policy of House of Brokers, Inc., DBA House of Brokers, Home Team, located in Boise, Idaho, adopted on July 1, 1996, pursuant to the "Idaho Real Estate Brokerage Representation Act", identifying and describing the types of representation that affiliated licensees at House of Brokers, Inc. (House of Brokers Home Team) may engage in with seller or buyer, or both.

SINGLE AGENCY REPRESENTATION IS THE WRITTEN POLICY OF HOUSE OF BROKERS HOME TEAM

(our preference is to REPRESENT ONLY ONE PARTY AS A CLIENT in any given real estate transaction)

HOB will offer client status to property owners desiring to list their property for sale with the Brokerage. Affiliated licensees of the Brokerage must document this relationship with a written listing agreement that clearly sets forth the creation of the agency relationship with the property owner. Prior to engaging into substantial business contact with the property owner, the affiliated licensee must deliver to the property owner a copy of the agency disclosure brochure established by the Idaho Real Estate Commission, and discuss with the property owner the nature of "client" status and "customer" status. The affiliated licensee will not form a non-agency customer status with the property owner without the specific permission of the Broker. The Broker feels strongly that the normal listing relationship requires a client relationship with the property owner.

As a client of HOB Home Team, the Brokerage owes the following duties to the property owner:

1) To perform the terms of the written listing agreement;

2) To exercise reasonable skill and care;

3) To promote the best interests of the client in good faith, honesty and fair dealing including, but not limited to:

a) Disclosing to the client all adverse material facts actually known or reasonably should have been known by the licensee;

b) Seeking a buyer to purchase the seller's property at a price, and under terms and conditions acceptable to the seller and assisting in the negotiation therefore;

c) For the benefit of the client: requesting reasonable assurance of a prospective buyer's financial ability to purchase the real property which is the subject matter of the transactions. This duty may be satisfied by any appropriate method suitable to the transaction or, when deemed necessary by the real estate licensee,

4) To maintain the confidentiality of specific client information as defined in the "Idaho Real Estate Brokerage Representation Act" and hereinafter discussed; and

5) To properly account for monies or property placed in the care and responsibility of the brokerage.

(These duties are specifically provided for in I.C. 54-2065. If a broker intended to form a customer status with sellers, I.C. 54-2064 sets forth those duties.)

With the specific approval of the Broker, affiliated licensees may at the request of the property owner enter into a customer relationship with the property owner pursuant to a written compensation agreement with the Brokerage. Such a situation may be a "for sale by owner" who is not willing to list the property with the brokerage but is willing to pay a commission, or a sophisticated property owner who simply wants the brokerage to perform permissible "ministerial acts" necessary to assist with a transaction. As a customer of the Brokerage, the Brokerage owe the following duties to the property owner:

1) To perform ministerial acts to assist the seller in the sale of the property;

2) To perform these acts with honesty, good faith, reasonable skill and care;

3) To properly account for monies or property placed in the care and responsibility of the brokerage;

4) To disclose to the seller all adverse material facts actually known or which reasonably should have been known by the licensee. However, the licensee owes not duty to the seller to conduct and independent investigation of the buyer's financial condition or to verify the accuracy or completeness of statements made by the buyer or any source reasonably believed by the licensee to be reliable.

(These duties are found in I.C. 54-2064. A definition of "ministerial acts" is found in I.C. 54-2061. (11).

It is the policy of HOB Home Team to have a written agreement with customer sellers (eg. "FOSBO" seller paying a commission to HOB Home Team for "non-agent" services.

It is the policy of HOB Home Team to allow the property owner to make the decision on whether the offer a subagency relationship to other brokerages in the SW Idaho MLS. Now that Idaho law will require a written brokerage agreement between the property owner and the specific selling office in a transaction, it is going to be logistically difficult to properly establish the selling office as a subagent or the property owner. The Broker feels that "non-agency" status for the selling office is very workable and would encourage this concept. With the consent of the property owner, it will be the policy of the Brokerage to share the commission with both non-agent offices and buyer representation offices. Affiliated licensees must advise client sellers of the nature of the selling office when presenting an offer to the client.

In dealing with property owners, the affiliated licensees of HOB Home Team shall deliver to the property owner a copy of the approved agency disclosure brochure before engaging in the "first substantial business contact" with the property owner. "Substantial business contact" is communications that when taken as a whole would create the belief by the property owner that he or she is dealing with the licensee on a business level. This would clearly be before discussing the terms of the listing agreement.

In addition to discussing the client and customer status concepts with the property owner before discussing the terms of the listing agreement, it is the policy of HOB Home Team to discuss the concept of "limited disclosed dual agency" with the property owner while entering into the listing relationship. As will be discussed below, it is the policy of HOB Home Team to recognize the formation of buyer client relationships, and to market listed properties to these buyer clients. The property owner needs to understand the nature of this concept and consent to it in writing as part of the listing documentation. The following language is required by Idaho law:

CONSENT TO LIMITED DUAL REPRESENTATION

The undersigned have received, read and understand that the brokerage involved in this transaction will be or may be providing agency representation to both the buyer(s) and the seller(s). The Undersigned each understand that as agents for both buyer(s) and seller(s), the brokerage will be limited dual agents and cannot legally disclose the either party certain confidential information concerning price negotiations, terms, or factors motivating the buyer to buy or the seller to sell without specific written permission of the disclosing party. The specific duties, obligations and limitations of a limited dual agent are contained in the Agency Disclosure Brochure as required by Section 54-2063, Idaho Code. The Undersigned each understand that a limited dual agent does not have a duty of undivided loyalty to either client.

SINGLE AGENCY REPRESENTATION IS THE WRITTEN POLICY OF HOUSE OF BROKERS HOME TEAM

(our preference is to REPRESENT ONLY ONE PARTY AS A CLIENT in any given real estate transaction)

It is the policy of HOB Home Team that any limited dual agency representation will require written consent from the Broker.

Under certain circumstances, and only at the mutual request of our clients, we may agree to a limited dual agency transaction, but normally would otherwise strongly encourage independent representation for each individual in any given real estate transaction.

It is the policy of the Brokerage that any consent for limited dual agency representation be obtained in writing at the time of negotiating an "in-house" sale.

A limited dual agent shall not disclose without the express written consent of the client the following information:

1) That a buyer is willing to pay more than the listing price of the property;

2) That a seller is willing to accept less that the listing price for the property;

3) The factors motivating the buyer to buy or the seller to sell; or

4) That a buyer or seller will agree to a price or financing terms other than those offered.

As a consensual limited disclosed dual agent, the affiliated licensee does not have a duty of undivided loyalty to either the seller client or the buyer client.

It is the policy of HOB Home Team to maintain a customer status with the buyer unless the buyer specifically agrees to a client status in writing after discussion of the relationship (discussed below). As a customer of the brokerage, the buyer would receive the following services:

1) The brokerage firm and the salesperson working with a customer are "nonagents". A customer is owed the following duties and obligations by a licensee.

a) assist the customer (buyer or seller) in customary and necessary services in taking a real estate transaction to closing or conclusion.

Example: writing up the purchase and sale agreement per the customer's instruction; setting up closing with title company; facilitating buyer's obtaining a loan, etc.

b) to give these services with honesty, good faith, and reasonable skill and care.

c) properly account for customer's money or property in care of the brokerage.

Example: follow rules of IREC regarding proper accounting of earnest money received.

d) disclose to the customer all "adverse material facts: the licensee actually knows or reasonably should have known.

Example: licensee knows basement floods every spring; or sees water stains on basement walls sufficient to cause inquiry. This will be subjective.

2) The brokerage firm and the salesperson working with a customer-buyer DO NOT owe the customer a duty to independently inspect the property for the benefit of the customer (buyer) nor to independently verify the seller's own representations, if reasonably believed to be reliable.

3) The brokerage firm and salesperson working with a customer seller DO NOT owe the customer a duty to independently verify or investigate the buyer's financial condition nor any statements made by the buyer which are reasonably believed to be reliable.

As a buyer client of the Brokerage, the buyer would receive the following services:

1) The brokerage and affiliated licensees representing a buyer or seller are agents of the client and owe the following duties:

a) to perform the terms of the written representation agreement, whether listing contract or buyer-broker agreement.

b) to use reasonable skill and care

2) to promote the best interests of the client in good faith, honesty and fair dealing. This includes (but is not limited to):

a) disclosure of any adverse material facts the agent knows or reasonably should have known.

b) seeking an acceptable property for a buyer or an acceptable purchaser for a seller and assisting in the negotiations.

c) for a client-buyer: "conducting...a reasonable investigation of the property and material representations about the property made by the seller or seller's agent, or, when appropriate, advising...the client to obtain professional inspections of the property or to seek appropriate tax, legal and other professional advice or counsel."

d) for a client-seller: "request...reasonable proof of a prospective buyer's financial ability to purchase the real property... This duty may be satisfied by any appropriate method suitable to the transaction..."

 

The formation of a customer relationship with the buyer to perform "ministerial acts" and/or non-brokerage acts must be approved by the Broker and documented with a written compensation agreement.

In order to form a client relationship with the buyer, the brokerage must have a written agreement with the buyer. The terms and provisions of that agreement must be approved by the Broker. It is the policy of HOB Home Team to use the standard "Buyer Representation" forms from the Association of Realtors and which are on file at House of Brokers, Inc.

Idaho law requires that the approved agency disclosure brochure be delivered to the buyer before the "first substantial business contact". It is the policy of the Brokerage that the brochure be delivered and discussed with the buyer before showing any properties and before discussing any of the buyer's specific needs.

(Each broker should have a factual point of view on the point at which the disclosure should be made, and the actual policy statement needs to be tailored to the broker's position.)

Since it is the policy of HOB Home Team to form buyer client relationships, the affiliated licensee must discuss the concept of "limited disclosed dual agency" with the buyer and obtain the written consent of the buyer prior to engaging in a dual agency transaction. It is the policy of the brokerage to obtain that written consent in the buyer representation agreement and again at the time of negotiating the transaction.

"Limited disclosed dual agency" is specifically allowed by Idaho statute. However, engaging in dual agency without following the requirements of the law (54-2066) will be a violation. What are the requirements?

1) Brokerage must have specific "Consent to Limited Dual Representation: signed by all parties to the transaction. The form itself is contained in the statute, and the same language will be used by all Idaho licensees.

2) Brokerage and its licensees engaged in limited disclosed dual representation still owe client-type duties listed above to the buyer and seller being represented (to the extent the duties do not unreasonably conflict).

3) However, without written consent of the appropriate client, the brokerage involved in limited dual agency and its licensees shall not disclose to the other client:

a) That a buyer will pay more than listed price

b) That a seller will accept less than listed price

c) The personal factors motivating the purchase or sale

d) That the buyer or seller will agree to price or terms other than as listed.

4) Can a buyer client sign the "Consent to Limited Dual Representation" form at the beginning of your client relationship? Yes. The form may be included in a listing contract or representation contract. However, remember to obtain the signatures of all parties. When you put records in your file, you will want one Consent signed by the buyers and one signed by the seller, or a single document signed by both buyers and sellers.

5) Must a buyer or seller client consent to Limited Dual Representation? NO.

 

 

 

It is the policy of HOB Home Team that the business relationship between the brokerage and the seller or buyer be determined as early as possible. Idaho law requires that it be determined before preparation of the purchase and sale agreement and that all required consents be executed in writing. Disclosures need to be made to all parties before presentation of the purchase and sale agreement.

The purchase and sale agreement or an attached document must confirm the representation understandings. The statutory format is as follows:

REPRESENTATION CONFIRMATION

In this transaction, the brokerage(s) involved had the following relationship(s) with the BUYER ("agent" or "nonagent" or "limited dual agent"):

Listing broker acted as a(n)...for the buyer.

Selling broker acted as a(n)...for the buyer.

In this transaction, the brokerage(s) involved had the following relationship(s) with the SELLER ("agent" or "nonagent"or limited dual agent"):

Listing broker acted as a(n)...for the seller.

Selling broker acted as a(n)...for the seller.

Each party signing this document confirms that he or she has received, read and understood the Agency Disclosure Brochure and has elected the relationship confirmed above. In addition, each party confirms that the broker's agency office policy was available for inspection and review. EACH PARTY UNDERSTANDS THAT HE OR SHE IS A "CUSTOMER" AND IS NOT REPRESENTED BY A BROKER UNLESS THERE IS A SIGNED WRITTEN AGREEMENT FOR AGENCY REPRESENTATION.

As previously stated, the consensual existence of a "limited disclosed dual agency" status will also be confirmed in writing as part of the purchase and sale agreement documentation.

Idaho law defines "confidential" client information: as information that is:

1) Not a matter of public record,

2) A matter that the "client" has not disclosed or has not authorized to be disclosed,

3) A matter that if disclosed would be detrimental to the client, and

 

4) A matter that the client would not personally be obligated to disclose to another party to the transaction.

Information required to be disclosed in order to avoid fraudulent misrepresentation and information that is generally disseminated in the marketplace is not "confidential information".

As long as information obtained by an affiliated licensee of the brokerage from a client remains within the definition of "confidential Information: it can not be disclosed without the consent of the client. This rule applies even after the termination of the brokerage relationship with the client.

(The definition of "confidential" information: is found in I.C. 54-2061(5) and 54-2066(2) & 54-2070.)

1) Keeping "confidential client information" confidential. Review the specific definition of "confidential client information." Section 54-2061-(5):

a) is not public record

b) has not been already disclosed to third parties (i.e. generally known) or if you have not been authorized by the former client to disclose it

c) if disclosed, would be detrimental to the former client; and

d) is not something the former client would be obligated to disclose by law or rule or to avoid fraudulent misrepresentation.

NOTICE: Client confidential information remains confidential even after your client relationship has ended, and until such time as it no longer meets the statutory definition of "confidential client information." Use care here. Seek written permission before releasing confidential information pertaining to former clients!

This policy shall be made available for review and inspection potential customers and clients of HOB Home Team. Affiliated licensees of HOB Home Team will review this policy statement on a quarterly basis, and abide by its requirements and guidance.

The new law and rules do require that the policy be available for inspection by sellers and buyers, and that it be "implemented" in the brokerage. Each branch office must have a copy.

ASK US FOR A COPY OF THE "BLUE BROCHURE" WHICH IS PREPARED BY THE Idaho Real Estate Commission TO EXPLAIN BASIC AGENCY ISSUES AND YOUR RIGHTS AS A BUYER OR SELLER.