Can real estate teams represent both the seller and buyer in a transaction?

Real estate teams are not legally recognized as separate entities from the Broker-Agent relationship. A team's ability to engage in dual and designated agency depends on overall brokerage policy and how the team members work together. If the brokerage has a designated agency structure, one team member can be appointed as the seller’s agent while another serves as the buyer’s agent so long as measures are taken to ensure confidentiality and the agents are able to offer full representation to each client.

 When considering how the real estate team works within the brokerage, it is essential for teams to analyze how they function: do they all work together for each client? Do they have access to each other's transaction files? Or do they work separately for each of their clients? As long as team members do not have access to the seller's confidential information and have not been designated as the seller's agent, they are free to represent the buyer. This arrangement allows both agents to maintain a "wall of confidentiality" throughout the transaction, serving each client fully

 If, however, your team works together for each client and has access to client files, tread carefully. Remember, if a team member is listed as a designated agent for a client, they cannot remove themselves from that role in the transaction and switch to representing the buyer without creating a dual agency relationship. The smaller the team, the more difficulty there may be in managing the confidentiality requirements and providing full fiduciary representation to each client – brokerage policy and client consent govern here.

The seller wants to block a certain buyer from their property and delay showings until the weekend open house, can they do this?

 As a real estate professional, you are bound to follow lawful seller instructions but should look to provide guidance to avoid unnecessary pitfalls. As a first step, remind the seller of their obligations under fair housing laws. While a seller may wish to exclude a certain person from entering their home, it may be wise to balance the risk and benefit of doing so. Excluding an ex-spouse or a nosy neighbor may come with merit, but broader exclusions—like stating “no buyers without agents”—can lead to fair housing concerns if they result in a disparate impact on certain groups.

 To minimize disruptions in daily life or to encourage multiple bidders, a seller may instruct their agent to delay showings until an open house or advertise an offer deadline. Be sure that these instructions apply to all interested parties and originate from the seller. Additionally, be clear in your advertising instructions to other agents and the public that the seller is free to accept an offer at any time.

 With any seller instruction, while you may offer guidance in your experience as a market expert, be sure these instructions are lawful, driven by seller choice, reduced to writing and evenly applied.

I want to include financial benefits in my marketing materials; can I offer a rebate of my commission to my client? Can I promise them a referral fee if they send me new business?

Marketing financial benefits to current and future clients is one way to differentiate your services. However, you must be careful not to run afoul of the legal limits of fee sharing. The law restricts the paying or sharing of a fee, commission, or other valuable consideration resulting from real estate sale to licensed professionals only, with very few exceptions. One exception includes payments made to the buyer or seller involved in the transaction. See 254 CMR 3.08 and M.G.L. c. 112, § 87QQ.

 This means that you are free to share your commission, so long as brokerage policy allows, with other licensees and with the buyer or seller in the current transaction. Advertising rebates at closing, or assistance with buyer’s closing costs for example, are acceptable under the law; enticing referrals by promising a fee from another transaction, is not. While you can rebate a portion of your commission to your buyer or seller client, you cannot pay them referral fees for future business. If you have questions about whether or not your advertising materials comply, be sure to check in with your broker.

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Services provided through the Massachusetts Association of REALTORS® is intended for informational purposes and does not constitute legal advice, nor does it establish an attorney-client relationship. The Massachusetts Association of REALTORS®, by providing this service, assumes no actual or implied responsibility for any improper use of responses to questions through this service.  The Massachusetts Association of REALTORS® will not be legally responsible for any potential misrepresentations or errors made by providing this service. For more information regarding these topics authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at legal@marealtor.com.