Written Brokerage Agreements in Virginia; the Law as of July 2012

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I’m going to lightly touch the surface of this topic, so please call or email me if you would like a more in-depth review of real estate agency. It can seem confusing, but it is really very straight forward. The bottom line is the “written disclosure” of Brokerage relationships – informing consumers as to who licensed real estate Brokers and their sales people represent at a given time – became effective on the first of July 2012.


It may seem obvious that real estate agents and their sellers have always had contractual relationships, clearly stating the terms and conditions under which sellers are represented by their sales persons. It is plainly stated in the contract/agreement between the two parties prior to moving forward with the work of selling a property. What used to be not so clearly evident were the often loosely structured relationships that could exist between real estate agents and purchasers – blurred lines of communication sometimes prevented clearly defined terms of assistance to exist between buyers and a licensee – at least until 2012.


It once seemed to be that the disclosure of brokerage relationships with buyers, to whom a real estate professional represented when engaged in conversation with a person of interest, was largely up to interpretation of the individual agent; the silence of allowing a conversation to unfold could be beneficial, helping to secure business for oneself. Well it’s not true, nor has it been that way for a very long time, but the inference for what was required be disclosed prior to 2012 seemed a little fuzzy.


Well as of 1 July 2012 the law regarding the disclosure of brokerage relationships became very clear; not only must sellers have a contractual relationship with licensees, but now so do buyers.  The updated law requires that real estate agents must have written agreements in place in order to assist buyers, or to get in writing the disclosure of their agency relationships when engaging in substantive conversation with any potential client or non-client.


For example, I recently received a sign-call from a purchaser relocating to our area who wanted to see one of our listings. She also asked, since we were meeting, if I could show her a couple of other homes in the same immediate area. When I asked, she stated that she was not working with an agent. I informed her that I represented the seller on this particular listing, but that because she didn’t have an agent working with her, I could help her with this property and the others she wanted to see. I stated we would go over this in detail when we met, so we made an appointment to meet.


At my listing we politely engaged in conversation, and I almost immediately reminded her that I represented the seller of this property, and that I would have some paperwork to review with her before we could go into any details on this home and the others she wanted to see. My primary objective was to explain “Agency”, and to offer an explanation of the different types of relationships that exist between buyers, sellers and licensees in real estate.


When she told me that she had seen other properties with a different agent in another location (stupid me for not probing further before agreeing to meet), but that they didn’t have this conversation, nor did they have her sign any paperwork – nearly two years after this very specific change in the law, countless hours of required agency classes, and endless courses of continuing education, you could have knocked me over with a feather!


What the consumer should know is that Virginia Law requires all those licensed to sell, purchase, lease or manage real estate “to make prompt written disclosure of any brokerage relationship to members of the public”. It perhaps gets confusing because different forms are required depending on the circumstance of the public’s interaction with a licensee. Some forms are simple “disclosures”, but others may be “contractual”. It is important to know the difference, to understand what is being signed, and to get legal guidance if they are uncertain. The law is designed to protect the consumer, but the result is to secure a stronger working relationship between the public and real estate licensees.


In summary, the full explanation of brokerage relationships are to be provided and agreed to in writing before a consumer agrees to proceed with a real estate licensee. The aim of this brief article is to inform the consumer that change in Virginia “Agency” law impacts how the business of real estate is being conducted as of 1 July 2012. As a result, the public will be presented with disclosures that require their written acknowledgement in order to have a licensee provider certain information, something they are not used to seeing, but should be expecting. Consult your most trusted real estate advisor for more information, or contact us if we may be of assistance to you or someone you know.


Ann & John VanderSyde are Associate Brokers at Virginia Properties, and licensed Realtors in Virginia. In addition, John is a licensed Architect in Virginia and the District of Columbia.

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