How is the New Mass Agency Law Working?
Monday, October 16th, 2006After a year of implementation how is the new Mass Agency Law working?
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In July of 2005 a new law went into effect that changed the old agency disclosure form and included new ways for real estate agents to do business in Massachusetts. Practically speaking, it did away with sub agency, the approach that said, “If a cooperating agent wants to show my listing and get paid they better work for my seller�. It also introduced a replacement option for Dual Agency called Designated Agency and formalized a non-agency relationship with consumers called Facilitator.
Now that summer of 2006 is ending, how has it gone for the past year of this new law? My experience as a real estate instructor is that there is mass confusion in the field. Real estate agents feel the new disclosure is very cumbersome and confusing. Many are not sure exactly what sections of the form they should fill out and sign. And there are still those who want to change hats midstream when the particular approach they have agreed to follow is financially penalized in the MLS offer of compensation.
While some offices prefer to continue to be seller representatives the new law makes it highly difficult if not impossible.  Overnight the traditional way of doing real estate went out the window. Sub agency relationships are now practically non-existent. And while there may have been some good intention in the change, we may have thrown the baby out with the water.
Designated Agency has dominated the industry as the popular way to do business. It’s a form of Dual Agency that allows individual agents within the same office to represent both sides of the transaction. This way both seller and buyer can be fully represented and the company can collect both sides of the commission. But the inherent conflict is still present in any office that attempts to represent both seller and buyer at the same time.
Facilitation has not yet become as popular as other approaches and some seem to think it will go away. A facilitator does not represent either the seller or the buyer, but rather works as a matchmaker to bring the parties together. Firms that focus on seller representation need to act as facilitators when showing properties listed with other companies since the formerly popular sub agency relationship is no longer extended.
Maybe facilitation should be practiced more. At least it doesn’t force a buyer into a relationship they may not understand or want.  This is my concern about the way Designated Buyer Agency is done in offices that will not allow facilitation.  When the buyer walks into a Designated Agency office they will automatically be represented by the agent that shows them listings. Whether the buyer wants it or not, they will be represented in either an in-house or cooperating firm’s listing. Is anyone explaining to these buyers the vicarious liability they take on in this type of forced relationship? Or are we going to live through another several decades of non-disclosure as we did in the sub agency relationship?
So how is the new agency law working? You tell me.