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Why are Builders LICENSED AGENTS Held to a Different Standard than ALL other LICENSED AGENTS in Maryland?

In Maryland last year Builders were required to have ALL of their sales agents to get their real estate licenses. There were many reasons for this; the main ones were to supposedly benefit the buyers who decide to purchase new construction from builders. However, from what I have seen in the past year, it really doesn't matter that they have their licenses now as many of them are still doing "business as usual" and violating AGENCY LAW!

When I meet a prospective purchaser at the FIRST FACE TO FACE appointment I pull out the Understanding Whom Real Estate Agents Represent (Agency Disclosure) Form and go over it with them as this is REQUIRED BY LAW! During this disclosure if I am showing one of my own listings I am required to tell them that I work for the seller. I also ask them if they are working with a real estate agent either through a written or a verbal agreement and if they are I certainly DO NOT EVER try to BREAK UP that relationship. When is the last time that you have heard a builder's licensed sales agent tell someone that they represent the builder? Have you ever seen them use an agency form? The only form I have seen is a registration form that they require to be filled out as soon as the prospective purchaser walks in the door so that they can cut their agent out of the deal if their agent is not there with them!

Bottom line, BUILDERS SALES REPRESENTATIVES or their now LICENSED REAL ESTATE AGENTS continue to violate AGENCY LAW and tell prospective purchasers that they can give them a better deal if they don't work with their real estate agent (EVEN IF THE BUYER TOLD THEM THAT THEY WERE WORKING WITH ONE IN THE FIRST PLACE)! That is no different than me telling someone who is interested in one of my properties if you purchase it without your agent, I can get you a better deal! That would certainly put me in an arbitration hearing and possibly in front of the Maryland Real Estate Commission where I'm sure I would get a fine at a minimum if not lose my license entirely.

If you are considering buying a new home in Maryland make sure you understand that the BUILDERS AGENTS work for THE BUILDER, NOT YOU! They do not represent your interests and will not negotiate for you on your behalf (even though many of them act like they are doing that). If you are considering purchasing a new home, I would highly recommend locating a competent real estate agent in your area who can help you negotiate and look out for your interests in the transaction!

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FOR MUCH MORE INFORMATION ABOUT REAL ESTATE IN MARYLAND VISIT WWW.ISELLMDHOMES.COM TODAY!

Michael D. Klijanowicz, Multi-Million Dollar Real Estate Agent
Long & Foster Perry Hall

(410) 529-1900 X 3158 Office
(410) 236-3331 Cell

http://www.isellmdhomes.com/

Serving Buyers & Sellers in the
Greater Baltimore & Harford County Metropolitan Areas

CONTACT ME FOR MORE INFORMATION - FREE CONSULTATIONS AVAILABLE!

"LIST WITH ME & SEE YOUR HOME ON TV!"

Posted by Michael Klijanowicz - Relocation Specialist - Baltimore & Harford County on 09/05/2008 07:44 AM

Comments (6)

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6 Comments on Why are Builders LICENSED AGENTS Held to a Different Standard than ALL other LICENSED AGENTS in Maryland?

Michael, in my experience, builders require licensing of on-site agents, then require that the license be "put on ice" to avoid conflict of interest (no temptation to procure business from the builders customers). For this reason, they remain "employees" of the builder, and are not subject to disclosure laws (although good on site people make it clear that they do represent the interest of the builder). As with resale, unfortunately the bad come with the good.

09/05/2008 08:11 AM

by Options Realty

Every state is different - in ours, builders may hire a real estate company to help them sell homes (my company is a top provider for this and I work with a couple of builders myself in this capacity) but many of our local builders do hire employees who either are NOT licensed, or their licenses are "on ice" as Options Realty mentions.

Buyers need to realize that those employees are bound to do what's best for the builder, and since they do not have to follow licensing law in most cases, buyers are even more on their own than when dealing with an agent who has agreed to a code of ethics.

Most of our builders do not play the "cut your agent out" game because they are smart enough to know that we agents are the biggest source of buyers for them in the first place. There is NO price difference when you don't use an agent here - a good builder doesn't play games.

Buyers...be smart and USE an agent when you buy new! It costs you NOTHING extra and it keeps the builder on their toes to do their best for you.

09/05/2008 08:51 AM

by Suzanne Champion ---> Columbus Ohio Real Estate (Coldwell Banker King Thompson - Westerville Ohio)

Michael,

I suspect that the state of Maryland required the licensing of builder's representatives so that they could hold them to the requirements of Maryland's real estate rules and regulations. If those representatives are not meeting those requirements, someone should report them to your real estate commission. It is fine to complain about the situation but you should also do something about it. Indeed, the preamble to your code of ethics requires it.

09/05/2008 11:05 AM

by Bill Schwent - Santa Fe broker (Casa Tierra Realty)

Micahel, I am a firm believer in that all should be treated equally.

09/05/2008 01:37 PM

by Danny Thornton (Home America Mortgage, INC.)

Michael,

There is no difference in the eyes of the RE commission between licensees regardless of who they work for. As the law is written the agent must have their license status as active and be working under a broker. They are not exempt from any of the laws that govern all of us. If you know an agent of a builder is not following the law as far as agency disclosure you should report them.

The other issue you bring up is a little different. It is true the agent should ask if the buyer is currently under a written buyer agency agreement and if so that they could be liable to pay their agent a commission if they buy directly from the builder. If the builder's agent does disclose agency relationship they are still permitted to sell the home to the buyer. Agency agreements have nothing to do with procuring cause in Md. While it's unfair to the buyer it is legal.

09/05/2008 07:24 PM

by Larry Riggs (Re/Max Results)

Thank you all for your well thought out comments! I hope that some buyers in Maryland read this BEFORE they start looking at new homes on their own without any agent representing them!

09/05/2008 08:10 PM

by Michael Klijanowicz - Relocation Specialist - Baltimore & Harford County (Baltimore & Harford County Maryland - Long and Foster )

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