To Sign or Not to Sign, That is the Question...

Virginia Brokerage Law Requires Clients’ Signatures before Showing Homes.

New brokerage laws went into effect in Virginia July 1, 2012.   This new law requires that a brokerage relationship has to be established in order to perform brokerage activities with a client.  The main change that the general public will notice is that they will be asked to sign a “Buyer Broker Agreement” before a Realtor, or Real Estate Agent, can show them a property. 

There is great trepidation in the industry about this, because some Realtors fear that buyers will resent being asked to sign a form when all they want to do is see a house.  Realtors and real estate practitioners (yes, there is a difference.  Realtors are members of the National Association of Realtors; they usually work in the residential sales arena; they adhere to a code of ethics and they can use the local multiple listing service.  Real Estate Agents are licensed in Virginia to offer real estate services, but they do not belong to NAR.  These are often commercial agents, or in small brokerage companies, and they are not part of the multiple listing services, but they are still subject to the laws of Virginia.)  have been required to disclose who they represent since the 1980s.   This disclosure was supposed to be made “at the first material discussion of a specific property”.    While some practitioners, myself included, usually asked buyers to sign these forms at the first meeting, the general practice had evolved to asking for this disclosure to be signed upon writing a contract.  This was often done after showing the buyer multiple homes.  Now the law will prevent this activity.  Before an Agent can show you properties, they will have to establish an agency relationship with you; that is you will sign the Buyer Broker Agreement.  Otherwise, you will have to sign a form where you recognize that you are un-represented, and that the agent represents the seller.

How will this affect you, the buyer?

At open houses, you will be asked to sign a form.

If you find a property on the internet which you like, you will be asked to sign something when going to view that property.

What changes will this bring about?

It seems to me that Buyers will have to take a minute to think about the financial and legal decisions they are making much earlier in the process. 

What do you think?

I will be very interested to see what you, the general public, think about this disclosure.  Do you think that it will benefit you to know what role the agent is serving when they show you a property? 

Or, do you think that signing papers when you just want to see a house is a hassle?