In Indiana, real estate brokers and their salespersons are required to disclose the type of working relationship they have with the buyers and sellers in a real estate transaction. There are several types of relationships that are available to you. You should understand these at the time a broker provides specific assistance to you in buying real estate. Buyer’s Agent and Seller’s Agent relationships are commonly referred to as “agency” relationships and carry with them legal duties and responsibilities for the broker as well as for the buyer and seller. A buyer is advised to consult legal counsel before entering into any agency relationship.
A Buyer’s Agent acts solely on behalf of the buyer and owes duties to the buyer which include the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of and act as an advocate for the buyer. The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to sellers all adverse material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property. A separate written buyer’s agreement is required which sets forth the duties and obligations of the parties.
A Seller’s Agent acts solely on behalf of the seller and owes duties to the seller which include the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of and act as an advocate for the seller. The seller is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to buyers or tenants all adverse material facts about the property known by the agent. A separate written listing agreement is required which sets forth the duties and obligations of the parties.
A Limited Agent assists the buyer and seller throughout a real estate transaction with communication, contracting and closing without disclosing any of the following to either of the parties:
· Any material or confidential information, except adverse material facts or risks actually known by the agent concerning the physical condition of the property and facts required by statute, rule, or regulation to be disclosed and that could not be discovered by a reasonable and timely inspection of the property.
· That a Buyer will pay more than the offered purchase price for the property.
· That a Seller will accept less than the listed price for the property.
· Other terms that would create a contractual advantage for one party over another.
· What motivates a party to buy or sell the property.