Explanation of Consumer Licensee Relationships in Massachusetts

The disclosure is required by the real estate Licensing Board to make certain consumers are made aware of how real estate works in Massachusetts.  It’s merely a disclosure for consumer protection and does not obligate the consumer in any way.

It’s required of all licensees at the first personal meeting with a consumer to discuss a specific property. 

The potential relationships include Seller Agency, Buyer Agency, Facilitator or Non-Agency, Disclosed Dual Agency, and Designated Agency.  Subagency is when one firm also invites another firm to represent their client. This requires disclosure and consent.

In both Seller Agency and Buyer Agency the consumer is promised fiduciary level service which includes:

Obedience to the client’s lawful instruction.

Undivided Loyalty or placing the client’s best interest above all others.

Disclosure of everything known about the other side of the transaction.

Confidentiality for everything known about the client including finances.

Accountability to the client who is the principal or boss of the agent.

Reasonable Care and Diligence to avoid foreseeable risk.

Exclusive Seller Agencies and Exclusive Buyer Agencies are the only ones that can do this for their respective clients without conflict.  ESAs work only for sellers and never buyers and EBAs work only for buyers and never sellers.  Buyer’s Choice is an EBA.

There is an inherent conflict when a real estate firm represents both sellers and buyers at the same time.  This is called Dual Agency and must be fully disclosed to both parties and requires written, informed consent. 

Disclosed Dual Agency requires that confidentially remains, but the agent may not advocate for one side over the other since both parties are now being represented.  This equates a reduction in service for both parties. The agent works for both and must assume a neutral role.  Fiduciary duties are minimized or eliminated because of conflict.

Designated Agency is a form of Dual Agency wherein the individual agent may continue to fully represent their client while the other agent fully represents the other client.  One agent is appointed or designated to represent the seller and another represents the buyer.  Because an inherent conflict exists, the appointing agent is considered a Dual Agent.

The non-agency option in Massachusetts is called a Facilitator who does not represent either party.  A facilitator is like a match-maker trying to bring a buyer and seller together.  Confidentiality is not required since it is a fiduciary duty owed only a client.