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.
Some definitions to start:
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.
Our office policy is the agent represents the person they are working with as their legally designated agent, unless you have a written 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(s), unless another type of arrangement is agreed to in writing.
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.
It's important to note that agents working with the same brokerage company may be the legal agent of other competing sellers and buyers. The only agent owing you statutory duties are those designated as your legal agent and no other sales associate with that company. Be very careful what you say while in the office that could affect your position. The seller's agent has a duty of telling you anything of importance they may over hear that could enhance your negotiating position.
An example would be: while you are in your agents office, the agent representing a buyer over hears you telling your agent things are getting very hard and you need to sell like yesterday. That agent is obligated to tell his buyer clients what was over heard.
In multiple offer situations: All offers are presented fairly and honestly to the seller, preferably at the same time. 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. You can only accept one offer. If no offers are acceptable, you have a few choices: 1) choose one offer to counter and see where that goes or 2) if the offers are fairly close to each other, your designated agent can tell the buyer agents to have their buyer's come back with their highest and best offer.
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 written consent and you'll be provided with a form explaining dual agency, the pros and cons for dual agency, and given an opportunity to accept or decline it should the situation arise at the time of listing. YOU DO NOT HAVE TO ACCEPT THIS. It does place some limitations on your agent when negotiating.
If you have agreed to dual agency at the time of listing and a dual agent situation develops you'll be asked to confirm your prior consent on a confirmation form and again on the purchase contract form. A dual agency transaction places some limitations on the legal agent of both parties, who is bound by confidentiality to both parties, when negotiating price and terms. Among them, a dual agent cannot suggest prices to either party, what to accept, what to counter with, etc.
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 for dual agency representation then 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 same dual agent confirmation form allowing the dual agency up front and again in the offer. 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. The decisions are totally theirs.
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 or 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.
FYI: Generally, we will not be a disclosed dual agent. We will represent only the person we have been working with already. The may be some rare exceptions but generally the truth is that it is just easier to do it this way.
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.
We look forward to being your trusted real estate partner.
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1st Choice Homes Realty, 2021 Midwest Rd, Ste 200, Oak Brook, IL 60523 630-495-2888 By Appointment Only
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