As we discussed last week, Alabama law requires that information about the types of services to be provided to a buyer or seller must be given as soon as reasonably possible.
The Real Estate Consumers Agency and Disclosure Act (RECAD) requires the qualifying broker to determine the types of brokerage services which his company and agents may offer. These services include single agency, sub-agency, dual agency and transactional.
The second type of representation is Sub-Agency. An unusual, yet legal arrangement in Alabama where an agent represents another broker’s customer in the sale. It is a legal form of agency in Alabama, but it is seldomly ever used.
The fourth type of agency is a Transactional Broker. Transaction brokerage is a brokerage arrangement where the real estate agent assists one or more parties, who are customers, in a contemplated real estate transaction. In this agreement, the agent is not fiduciary or advocate of that party to the transaction. This means that real estate brokers and agents can act as intermediaries between buyers and sellers. With this type of brokerage arrangement, home buyers and sellers are customers and not clients of the licensees with whom they are working. The basic role of the licensee is to bring buyers and sellers together so that a real estate sale can take place.
Transaction brokerage arrangements are usually best suited for customers who do not need an agent to represent them in the negotiations for the sale or purchase of real estate. As a transaction brokerage, the agent must provide brokerage services to all parties honestly, in good faith, and avoid showing partiality to either buyer or seller. Alabama law also requires all licensees exercise reasonable care and skill when providing brokerage services. Agents are required to answer all questions completely and accurately. Additionally, they must present all written purchase offers to sellers promptly and in a truthful manner. Agents must keep confidential any information given to them in confidence, unless disclosure of this information is required by law.
Mike and Brandie Brown and the Josh Vernon Group are here to provide the best quality service in your transaction and make the process as smooth as possible. In our next post we will talk about the last service that an Alabama real estate licensee may provide, Limited Dual Agency. We will explain this type of service and help you understand the circumstances when it would be an appropriate option for your real estate needs.