Real Estate Agent and Broker Referral Services Key Terms
Protect your interests by understanding terms related to agent and broker referral servicesA real estate agent or broker referral service is a company that matches the seller or buyer with an agent or a team of agents who best know the type of real estate properties, either commercial or residential, that the client needs to buy or sell. The agents, brokers and clients involved in referral services should understand the terms pertaining to legal issues and agreements in order to ensure the protection of all parties in their dealings with each other.
Dual agencyOccasionally, in a real estate transaction, a broker or agent will act as a duel agency, meaning that the licensee is working with the buyer and seller. Dual agents must promise confidentiality and loyalty to both parties as well as full disclosure.
Real Estate Settlement Procedures Act (RESPA)The Real Estate Settlement Procedures Act (RESPA) was passed by the U.S. government to provide legal protection of consumer interests in a real estate relationship with a broker or agent. RESPA also protects consumers against unnecessary broker and agent fees in the real estate settlement process.
U.S. Department of Housing and Urban Development (HUD) provides complete information on the Real Estate Settlement Procedures Act. All parties involved in real estate agent and broker referral services need to keep the regulations established in RESPA in mind during real estate transactions.
NoncompetitionWhen a referral agent and a broker or real estate agent part ways in any real estate transaction, the referral agent should agree to "noncompetition" with the broker or real estate agent. The referral agent agrees in a noncompetition situation not to utilize any information provided a broker or agent for his or her own interests.
Foreign real estateOccasionally, when dealing with a real estate referral service, the concept of "foreign real estate" could enter the discussion. Foreign real estate is merely real estate not situated in the state where the buyer lives.
LawriterOhio explains how "foreign real estate" can pertain to property, dealer, salesperson or partnership.
IndemnificationIndemnification refers to agreements in which referral agents agree to hold brokers or real estate agents harmless in any claims, suits, judgments or other legal proceedings that result from violation of the agreements the two parties have. Insurance firms offer real estate professionals policies to protect them from professional negligence.
ASHI Reporter discussed a real estate referral agency's protection from indemnification. The Steeves Agnew Underwriting Agency provides a list of industry-specific extensions covered in a professional indemnity policy.
Copyright © 2013 Business.com, Inc. All Rights Reserved.