What Buyers Should Know

Real Estate Brokerage Services Disclosure 

Buying a home in Alabama differs from most other states. Alabama is one of three “CAVEAT EMPTOR” states where the responsibility to discover entirely falls upon the buyer. As caveat emptor means buyer beware. Most states are seller’s disclosure states. In Alabama, sellers must disclose defects that impact health and safety such as radon, toxic mold or lead based paint. Alabama sellers do not have to disclose any other defects outside of health and safety. Choosing the right Realtor® to assist you with purchasing property in Alabama is and should be a process of education.

THERE ARE THREE DIFFERENT REAL ESTATE BROKERAGE SERVICES AVAILABLE IN ALABAMA

 Choose YOUR Level of Service:

Single Agent, Dual Agent or Transaction Facilitator

There are three agency relationships that can exist in Alabama between buyers and real estate licensees. Alabama law requires the consumer to be informed of the differences in these three various relationships that can exists.  A form describing these relationships should be offered to you for your review. 

Choosing a Single Agency relationship gives you the best representation available. In a Single Agency relationship, licensees may negotiate on your behalf and provide confidential information known such as association business and financials. In a Dual Agency relationship, a licensee can represent both the seller and buyer as long as all parties agree to such in writing. In a Transaction Facilitator relationship, no confidential information can be disclosed by the licensee even if they have such knowledge as homeowner’s association financials or knowledge of defects in the property, unless health and safety is involved. In a Transaction Facilitator relationship, the licensee cannot negotiate on your behalf or share any confidential information that may impact your purchase decision, unless health and safety is involved.

Knowing the differences in each type of relationship can help guide your choice.

Further, The Alabama Real Estate Commission explains the Real Estate Brokerage Services Disclosure

“Rule 790-X-3-.13. Agency/Brokerage Services Disclosure

Agency/Brokerage Services Disclosure

(1) The Real Estate Consumers Agency and Disclosure Act (RECAD) requires the Alabama Real Estate Commission to write a Real Estate Brokerage Services Disclosure form which describes the alternative types of brokerage services available to consumers in Alabama transactions. The use of this form is mandatory as required by RECAD and this rule.

(2) Licensees, except those engaged in rental or property management services, and those in transactions set out in Section 34-27-82(d), are required to provide the Real Estate Brokerage Services Disclosure form to the consumer as soon as reasonably possible and before any confidential information is disclosed to any other person by a licensee. Consumers are not required by law to sign the form, although the licensee should encourage that it be signed. If the consumer declines to sign, the licensee shall make a note to this effect on the form. The text of the mandatory form is as follows:

THIS IS PROVIDED FOR INFORMATION PURPOSES.

THIS IS NOT A CONTRACT

REAL ESTATE BROKERAGE DISCLOSURE

“Alabama law requires you, the consumer, to be informed about the types of services that real estate licensees may perform. The Alabama Real Estate Commission requires the real estate licensee to sign, date, and provide you a copy of this form. Your signature is not required by law or rule, but it would be appreciated. The purpose of this disclosure is to give you a summary of these services.

A SINGLE AGENT is a licensee who represents only one party in a sale. That is, a single agent represents his or her client. The client may be the seller or the buyer. The licensee when acting as an agent must represent the best interests of the client by placing the interests of the client ahead of the interests of any other party. In a real estate transaction, when a real estate licensee is employed as an agent, the licensee is obligated to advise and advocate for the best interests of his or her client. A single agent must be completely loyal and faithful to the client.

When two or more licensees under the same qualifying broker are in separate agency agreements with a different party in the same transaction, the qualifying broker can designate those licensees as single agents as to the licensee’s client. The designation must be in writing and done as soon as reasonably possible. A designated single agent is not a dual agent, and neither the qualifying broker, the designated single agent, nor any other licensee involved in the transaction shall be assumed to  have knowledge to any other party with whom the licensee has not entered an agency agreement.

A DUAL AGENT is a licensee, who is an individual, acting as an agent for both the buyer and the seller. This may only be done with the written, informed consent of all parties. This type of agent must also be loyal and faithful to each client, except where the duties owed to the clients conflict with one another.

A TRANSACTION FACILITATOR assists one or more parties, who are customers, in a sale. Transaction facilitator describes a brokerage arrangement whereby the real estate licensee assists one or more parties, who are customers, in a contemplated real estate transaction, without being the agent, fiduciary, or advocate of that party to the transaction. The transaction facilitator can act as an intermediary between buyers and sellers. A licensee can serve as a transaction facilitator to a single party or to both the buyer and seller. A licensee can also represent one party as an agent and serve as a transaction facilitator for the other party in the transaction. In the absence of an agency agreement, a licensee is presumed to be acting as a transaction facilitator for any otherwise unrepresented party to whom the licensee is providing services.”

Choose your level of service.