Did you know that your Tennessee Realtor® owes certain duties to EVERY Buyer and Seller, Tenant and Landlord or generally everyone they work with during a transaction? Below I have reprinted the actual wording from the Tennessee Real Estate Broker Act and given an explanation. You may be surprised at the duties Realtors® owe to you.
1. To diligently exercise reasonable skill and care in providing services to all parties to the transaction.
Translation: Only agree to work with properties and situations where the Realtor® is knowledgeable, i.e., don't take on a commercial deal when the Realtor® has no knowledge of commercial transactions without engaging the assistance of an experienced commercial Realtor®.
2. To disclose to each party any adverse facts of which Licensee (the Realtor®) has actual notice or knowledge.
Translation: If a Realtor® is informed about a structural problem with a house, from that moment on, they are obligated to disclose this information to potential buyers.
3. To maintain for each party in a transaction the confidentiality of any information obtained by a Realtor® prior to disclosure to all parties of a written agency agreement entered into by the realtor to represent either or both parties in the transaction. This duty of confidentiality extends to any information which the party would reasonably expect to be held in confidence, except for any information required by law to be disclosed (see #2 above). This duty survives both the subsequent establishment of an agency relationship and the closing of the transaction.
Translation: So in other words, if a Realtor® is given confidential information but does not end up representing that party, the Realtor® is still required to keep that information confidential.
4. To provide services to each party to the transaction with honesty and good faith.
Translation: Act in good faith and be honest.
5. To disclose to each party to the transaction timely and accurate information regarding market conditions that might affect such transaction only when such information is available through public records and when such information is requested by a party.
Translation: For example, if a potential buyer tells the list agent that he "heard" that there was a new train station being put in behind the house and Realtor® was at a Chamber of Commerce meeting where the plan was unveiled, then yes the Realtor must confirm the information even though it may affect whether the potential buyer makes an offer.
6. To give timely account for earnest money deposits and all other property received from any party to a transaction.
Translation: Realtor® must account for any property, monetary or otherwise received from parties.
7. A) To refrain from engaging in self-dealing or acting on behalf of Licensee's immediate family, or on behalf of any other individual, organization or business entity in which Licensee has a personal interest without prior disclosure of such personal interest and the timely written consent of all parties to the transaction
Translation: Wow this is a mouthful but this is where the Personal Interest Disclosure form comes in. If a Realtor® is representing a family member or themselves in a transaction, that must be disclosed and signed off by each party to the transaction
7. B) To refrain from recommending to any party to the transaction the use of services of another individual, organization or business entity in which the Licensee has an interest or from whom the Licensee may receive a referral fee or other compensation for the referral, other than referrals to other Licensees to provide real estate services, without timely disclosure to the party who receives the referral, the Licensee's interest in such referral or the fact that a referral fee may be received.
Translation: Realtor® should not recommend any type of service vendor to parties where Realtor® is getting any kind of compensation from a vendor, i.e., lenders, home inspectors, warranty companies, etc, without first disclosing the possible referral fee.
So now you know what duties Realtors owe to everyone in a transaction. What duties do they owe to you, the Client?
8. Obey all lawful instructions of the client when such instructions are within the scope of the agency agreement between the Licensee and Licensee's client
Translation: The Client is the one making the final decisions in the transaction and Realtor® must abide by their wishes as long as the instructions are within the law
9. Be loyal to the interests of the Client. Licensee must place the interests of the Client before all others in negotiation of a transaction and in other activities, except where such loyalty/duty would violate Licensee's duties to a customer (someone who is not a "Client") in the transaction
Translation: The Client's interests must be protected above all others unless it violates 1-7 above
10. A) Scheduling all property showings on behalf of the client
10. B) Receiving all offers and counter offers and forwarding them promptly to the client
10. C) Answering any questions that the client may have in negotiation of a successful purchase agreement within the scope of the Licensee's expertise
10. D) Advising the client as to whatever forms, procedures and steps are needed after execution of the purchase agreement for a successful closing of the transaction
Translation: These are probably all the things you knew that a Realtor® was supposed to do, show properties, receive offers, assist with negotiations and advice clients.
Now you know the duties of a Realtor® - "who you gonna call"?