All You Never Wanted to Know About VT Real Estate Agency Agreements
Because practically all Vermont residential real estate sold by Vermont real estate agents is sold through one or more multiple-listing services (MLS), there are very few “exclusive” real estate listings in Vermont. MLS arrangements have several advantages for all parties of the real estate transaction and are accomplished by a blanket reciprocity agreement among Vermont Realtors of the multiple listing services.
- Sellers know that their property will receive maximum exposure because hundreds of Vermont real estate agents have access to the listing data.
- Buyers are able to work with one VT real estate agent and know that they have access to all available listings. They can spend time seeing properties and less time meeting with Realtors.
- Buyers are able to enter into buyer-broker agreement with their chosen VT real estate agents without fear this will limit their ability to view other Vermont homes for sale.
- Vermont Realtors know up-front the agent commission schedule, so they can focus on helping clients buy and sell homes.
In March of 1996, Vermont clarified its regulations and provided the option for agency representation for buyers of Vermont real estate. At one time, buyers were not provided the opportunity to have real estate agents represent their interests. Buyers can now use a VT Realtor to represent their interest in the purchase of real estate. While this provides another layer of protection for the buyer, it can sometimes create confusion. There are many different types of contractual relationships buyers and sellers can have with VT real estate agents.
- A real estate agent can act as a selling agent in a transaction. Seller Agents represent the seller’s interest in the sale of their property. Sellers may enter into an “Exclusive Right to Market Contract,” which provides compensation to the agency if a buyer is found regardless of the source of the buyer; an “Exclusive Agency Marketing Agreement,” which provides compensation to the agency if they or another real estate agency bring in a buyer, but allows the seller to also market the property on their own; or an “Open Listing Agreement,” which allows all agencies to market the property but only compensates that agency bringing in the buyer. This final agreement is usually only used for commercial real estate.
- Real estate agents can also act as a buyer’s agent in a transaction. Buyer Agents represent the buyer’s interests in their purchase of real estate. Buyers may enter into an “Vermont Exclusive Right to Represent Buyer,” or an “Vermont Exclusive Buyer Agency Contract.” The latter agreement provides representation only when negotiating with other agencies; the former agreement also provides representation when negotiating with unrepresented sellers, often known as FSBOs. Technically, there is also an “Open Buyer Agreement,” but this agreement is very rarely used in residential real estate because it offers no incentive for an agent to represent a buyer. Buyers with buyer-agreements are called “buyer-clients” or simply “clients”. Unrepresented buyers are called “customers.”
- Broker-agents are are similar to, and work on the behalf of the selling agents. By posting the listing information on a multiple listing service, selling agents are essentially contracting other agents (broker-agents) to help them sell the property. Included in the listing information is the commission other agents will receive if they bring in a buyer-usually 50% of the total commission. The distinction does not really change how buyers will interact with the broker-agent. The distinction is more important to other agents as it may effect the compensation agreement. The important thing to remember is that both selling-agents and broker-agents are working in the interests of the seller–in the first instance directly, in the second instance indirectly on the behalf of the selling-agent. If you’re a buyer without a buyer-broker agreement and you’re being shown a property by an agent not with the listing agency, you’re working with a broker’s agent and you are called a buyer-customer. In short, if you haven’t signed a buyer-broker agreement, you’re not being represented by an agent.
- Limited Agency. While any Vermont real estate agent can act in the capacity of a selling agent, buyer broker, or broker-agent, they cannot act in more than one capacity in a single transaction. Because of a perceived conflict of interest, Vermont real estate agencies cannot represent both the buyers and sellers in the same transaction. A problem arises when a buyer-client becomes interested in a property listed by the same real estate agency. Rather than one or both parties having to forfeit their right of representation, Vermont allows the real estate agency to act in a limited agency capacity if both parties agree. The real estate agency acts as impartial transactional facilitators in this role. Few agencies provide the option for buyers and many agents don’t even know that a limited agency option exists, so you when you are interviewing buyer-broker agents, you may want to ask if they offer this service.
View a copy of Vermont’s Real Estate Agency Disclosure Statement
View a copy of Vermont Exclusive Right to Represent Buyer
View a copy of Vermont Exclusive Buyer Agency Contract
View a copy of Exclusive Right to Market Contract
For more information about Vermont real estate agent legal policies visit the Vermont Secretary of State’s Office Website.