Agency – what should you expect from your broker/agent?

As consumers of services from a great variety of providers, most Americans are a trusting, but relatively naive group. If I asked you what services you believe that your doctor is to provide, how would you answer? “Uhh, to make me well, I guess.” How about what services your lawyer is to provide. You might answer, “to keep me out of jail, maybe; or, to get me money for some injury or loss that I’ve suffered.” So, what are the duties and services that you can expect from your Realtor? Because there was no good, consistent answer to the that question; and, because Realtors are licensed by the State of Michigan, the state passed a law that answers that question clearly.

The new Michigan real estate law concerning agency spells out quite clearly the expected duties and services that a seller or buyer may expect from his/her agent. It starts by defining the duties and the services a full-service broker/agent is expected to deliver and then specifies which services can be dropped off, if the arrangement between the buyer or seller and the broker/agent is less than full service.

Here are the minimum duties that it defines for a broker/agent:

1. The exercise of reasonable care and skill in representing the client and carrying out the responsibilities of the agency relationship.
2. The performance of the terms of the service provision agreement. This is the agency contract between the buyer and the broker/agent and it will normally define in some detail the responsibilities for both sides.
3. Loyalty to the interest of the client.
4. Compliance with the laws, rules, and regulations of the state and any applicable federal statues or regulations. The primary federal statue concerns disclosure about the presence of lead-based paint in the property.
5. Referral of the client to other licensed professionals for expert advice related to material matters that are not within the expertise of the licensed agent. This would include lawyers, accountants, and licensed technicians and inspectors.
6. An accounting in a timely manner of all money and property received by the agent in which the client has or may have an interest.. This includes accounting for the clients earnest money deposit.
7. Confidentiality of all information obtained within the course of the agency relationship, unless disclosed with the client’s permission or as provided by law, including the duty not to disclose confidential information to any licensee who is not an agent of the client.

The law goes on to explicitly define the services that a broker or agent shall provide to a client under a service agreement, unless some of the services are specifically waived under a”limited service” agreement. Those services are:

1. When the real estate broker or real estate salesperson is representing a seller or lessor, the marketing of the client’s property in the manner agreed upon in the service provision agreement.
2. Acceptance of, delivery, and presentation of offers and counteroffers to buy, sell or lease the client’s property or the property the client seeks to purchase or lease.
3. Assistance in developing, communicating, negotiating and presenting offers, counteroffers, and related documents or notices until a purchase or lease agreement is executed by all parties and all contingencies are satisfied or waived.
4. After execution of a purchase agreement by all parties, assistance as necessary to complete the transaction under the terms specified in the purchase agreement.
5. For a broker or associate broker who is involved at the closing of a real estate or business opportunity transaction, furnishing, or causing to be furnished, to the buyer and seller, a complete and detailed closing statement signed by the broker or associate broker showing each party all receipts and disbursements affecting that party.

So, what might you not get, if you sign a limited services agreement? Here’s what the law provides:

Individual services may be waived by a seller or a buyer through execution of a limited services agreement. Only those services set forth above in paragraphs 2, 3 and 4 may be waived by the execution of a limited services agreement.


Full service brokers like Real Estate One provide all of the services. If you hire some limited service broker that advertises that he/she can get you on the Multi-list Service for $500, they still owe you at a minimum that service, since it is what they advertise as their “marketing” service, plus they would have to provide, or cause to be provided, a set of closing statements to you and the buyer at closing. That’s about all you would get from those clowns, if that. You’ll notice also that the law does not provide for waiving or dropping off any of the duties that are defined, just some of the services.

As I cautioned a few days ago, if the agent that you’ve somehow engaged, whether through a sign call or a cal to a local office or because you saw their ad somewhere, doesn’t take the time to disclose these duties to you and go over the rest of the Agency Disclosure Document, which is required by law; be afraid, be very afraid, you’ve stumbled upon at best a lazy or incompetent agent and at worst a dishonest one. Just remember never disclose any confidential information to a real estate agent or broker with whom you don’t have a signed agency agreement – they are, by default, working for the seller.