In a prior post, I provided general concepts for business owners to consider before retaining a real estate broker. Below are details about the different types of engagements and some characteristics of each.
The Brokerage Relationships in Real Estate Transactions Act (“BRRETA”) is the general Georgia law that governs real estate broker conduct. BRRETA requires that brokers exercise “reasonable care” in discharging all of the duties spelled out in BRRETA.
Generally, brokers can serve a participant in a real estate transaction either as a “customer” or a “client.” Under BRRETA, a “client” is a person who is represented by a real estate broker pursuant to a written brokerage agreement. A “customer”, on the other hand, is someone for whom the real estate broker is performing ministerial acts (pursuant to either a verbal or written agreement).
If you are merely a customer of a broker, the broker’s duties are limited to those spelled out in BRRETA. As a broker for a client, the broker must comply with all of the duties spelled out in BRRETA and perform all duties outlined in the written engagement agreement.
Below are a few key terms and characteristics of each:
Ministerial act. These acts do not require the exercise of professional judgment or skill. For example, identifying property for sale, providing real estate statistics and information on a property or delivering pre-printed real estate form contracts are all ministerial acts.
Listing Broker. A broker who represents the seller of property. Some of the duties imposed on a listing broker include the obligation to present all offers to and from the seller, even when the property is subject to an existing sale contract, timely accounting for any money received, and disclosing to the buyer material facts the broker has actual knowledge of.
On top of that, brokers engaged by sellers must disclose to all parties all adverse material facts relating to the physical condition of the property that are known by the broker and that the buyer could not find through a reasonably diligent inspection of the property.
Selling Broker. This is the broker that represents a buyer. As the buyer’s representative, the Selling Broker similarly has duties to his or her own client as well as to all participants in the transaction. The Selling Broker must reveal to his client any material facts about the Property the broker is aware of. Importantly, the Selling Broker must maintain as confidential information obtained from the client and cannot share with the Listing Broker
I hope you find the above terms helpful as you engage in real estate transactions. My next blog will discuss terms in an engagement agreement.