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It seems that everywhere we turn the government is trying to protect us. But from what, ourselves, others? Nobody can truly be sure. Enter the Consumer Notice!

Take commercials for prescription drugs like Viagra® for example. The whole commercial may last 60 seconds. In that time, we are told every adverse thing that may happen to us if we use the product, and what to do if something does. If you get a rash stop using the product, get a physical to make sure you are healthy enough for the task at hand if you have an erec…Well, you get it. We remember some of the warnings because they are humorous and end up on shows like Saturday Night Live. Other warnings are long forgotten even before the commercial is over.

In November of 1999, Pennsylvania enacted the Agency Disclosure Law, which was designed to protect Consumers. The Act requires that prospective customers about to engage in a real estate transaction read the Consumer Notice and sign it prior to entering into a meaningful discussion with any real estate sales associate.

You can read the full Consumer Notice at the following link ~ https://jeffreyhoguerealtor.com/pennsylvania-consumer-notice/

Does the Consumer Notice protect the consumer and if so, from who or what?

The second paragraph of the Consumer Notice states the following. “Before you disclose any information to a (real estate) licensee, be advised that unless you select an agency relationship the licensee is NOT REPRESENTING YOU. A business relationship of any kind will NOT be presumed but must be established between the consumer and the licensee.”

The paragraph implies that there are things a consumer may NOT want to tell a real estate agent until they understand what an agency and business relationship is, who is representing who and why. The implication comes from years of ambiguity relating to who represents who in a real estate transaction.

The Consumer Notice is meant to shed light on the types of agency available and what they mean. There is Seller Agency, Buyer Agency, Dual Agency, Designated Agency and Transaction Licensee. In a follow-up to this article, I will further explain these agency types.

For now let’s use the following example. You, the buyer, visit an open house and speak to the attending real estate agent. You have an interest in the home. The agent tells you they are the listing, or seller’s agent but never give you the Consumer Notice. Even if they did would you read it on the spot? Remember the commercial?

The next day you decide to contact the agent and ask to see the home again. It is now when the Consumer Notice is presented to you by the agent. You proceed to read it and decide that you would like to be represented by a buyer agent.  Now the fun starts.

Telling the seller’s agent you want to be represented by someone else means that they will have to split the commission with a buyer agent. The seller’s agent may state that you can get a buyer agent, but you would have to pay them yourself. See, there is also a law of procuring cause in Pennsylvania. It is often referred as the threshold law or the doorstep rule. This rule states that you, the consumer, showed interest in the property due to a particular agents marketing and actions. In this case, it is the seller’s agent.

Have you been disenfranchised? Are you losing your rights? The second paragraph of the Consumer Notice stated that there is no implied relationship. Is this a conflict with the law? Either way, it is a pain in the, you know what. All you want to do is buy a home and be represented properly not get caught up in all the agency junk.

Wait…The Consumer Notice was supposed to have worked all this out! Maybe we need a notice to the Consumer Notice?

Consider this article your home search warning. Understand how you want to be, or not be, represented in a real estate transaction before you show up at the door.

Next time you may want to listen to the whole commercial, not just the funny parts.

Knowledge is Power!

Jeffrey C. Hogue