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Agency and Facilitation

Real estate licensees vs. Realtors®. Anyone who expects to collect a fee for selling real estate must be licensed. A large percentage of licensees are members of the National Association of Realtors®, the trade organization of the profession. Only members of NAR and the state and local boards may participate in MLS, Multiple Listing Service and IDX, the Information Data Exchange.

Facilitation or Transaction Brokerage as it is called in some states, has been around since 1990 when it first appeared under Colorado law. It is now part of state law in roughly half the states in the nation including Massachusetts. Vermont has a curious compromise arrangement called "limited agency".

Licensees can assist the public in the following ways in MA: Buyer Agency, Seller Agency or Facilitation. It is quite common for clients to sign a working agreement with a licensee and under law, licensees must provide a disclosure form to members of the public with whom they intend to work.

Agents owe duty of absolute faith to lawful instructions of their principals, in other words, follow the guidance of the client and advocate only their client's interests above all others just as does an attorney.

Facilitators are more like mediators, they owe a duty of faith to the transaction between the two parties, to see to it that both parties are fairly and justly treated and provided the same information with which to make well informed decisions. The Facilitator does not take sides.

In all other respects, the Facilitator and the Agent have the same legal obligations as to trustworthiness, accountability for funds entrusted to them, full disclosure.

One other significant difference between the two functions relates to the principal of vicarious liability. Under Agency, the client can be held legally liable for the misstatements or even misdeeds of their agent and thus be exposed to monetary damages. Under Facilitation, that exposure does not exist.

Agency, when practiced according to law and custom, leads often to conflict, the tendency for one party to try to gain the upper hand over the other.

Facilitation is designed specifically to level the field such that both parties are equally protected and have the benefit of a more comfortable, mutually satisfactory transaction.

In reality, the successful agent is acting more like a Facilitator than and Agent because if he or she doesn't they tend to lose more transactions than they help create.

The majority of buyers and sellers want assistance with what is a relatively complex transaction of considerable importance in their lives and often carrying great value as well. They do not want an ardent advocate who will create an adversarial atmosphere as both parties want to do business, not battle.

Facilitation most closely meets the needs of the average consumer though most real estate licensees have little real understanding of it as of yet, since it is still quite new in MA. It is also true that many have been falsely persuaded to think that Facilitation provides fewer services.  Not so, if done correctly.

Whether Agent or Facilitator, you as the client/consumer should find a licensee who is experienced, trustworthy, has a proven track record and is devoting a large percentage of their time to the business. Friends and family may be qualified but sometimes are not and thus can make costly mistakes. Contrary to some beliefs, when done right, this is a complex business with lots of subtleties that make a great deal of difference in the end to whether or not yours was a happy and beneficial transaction for all concerned. 

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