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Important Update on “Touring Agreements” and Maryland Law

In the wake of NAR’s Settlement Agreement and the Practice Changes we are all the process of implementing, you may have recently seen a “Touring Agreement,” by which an agent would have a “written agreement” with a buyer who wants to tour a home. Before using this Touring Agreement, or any other agreement for that matter, please speak with your Broker or Office Manager. In our opinion, the Touring Agreement is not compliant with Maryland law.  

Under the Maryland Brokers Act, showing a home is “providing brokerage services," which may only be accomplished by entering into a written “brokerage agreement” that establishes the “brokerage relationship.”  

Here’s how those terms are defined in the statute: 

Brokerage agreement 

“Brokerage agreement” means a written agreement between a broker and a client to provide real estate brokerage services under a brokerage relationship. 

Brokerage relationship 

“Brokerage relationship” means a relationship under a brokerage agreement between a client and a broker who has been authorized by the client to provide real estate brokerage services in a residential real estate transaction. 

Under Maryland law, if you are meeting with a buyer who refuses to sign a brokerage agreement, you represent the seller. If you are showing that unrepresented buyer homes listed by your broker, you are a “sellers’ agent” and if you’re showing homes listed by another broker, you are a “subagent.”  

The Touring Agreement that has been shared with us is not a “brokerage agreement” under Maryland law, because it is not an agreement between a broker and a client. It clearly recites that the buyer and broker are not entering into an agency relationship and “Buyer is not a client.” 

The Maryland Brokers Act requires a licensee to disclose to an unrepresented buyer that the licensee does not represent the buyer. The Maryland Real Estate Commission has created a complaint form, the Understanding Whom Real Estate Agents represent form.  

The Brokers Act identifies the requirements for the disclosure, which must be made to an unrepresented buyer: 

Contents of disclosure 

The written disclosure shall explain: 

(1) the differences between a seller's agent, buyer's agent, subagent, dual agent, and intra-company agent; 

(2) the duties of a licensee to exercise reasonable care and diligence and maintain confidentiality; 

(3) that regardless of whom a licensee represents in a real estate transaction, the licensee has a duty to treat each party fairly and honestly, promptly present each written offer and counteroffer, respond truthfully to each question, disclose all material facts that are known or should be known relating to a property, and offer each property without discrimination; 

(4) that a licensee is qualified to advise only on real estate matters and that legal or tax advice should be obtained from a licensed attorney or accountant; 

(5) the need for an agreement with a seller's agent, buyer's agent, or dual agent to be in writing and to include the duties and obligations of the agent, how and by whom the agent will be compensated, and any fee-sharing arrangements with other agents; 

(6) the duty of a buyer's agent to assist in the: 

(i) evaluation of a property, including the provision of a market analysis of the property; and 

(ii) preparation of an offer on a property and to negotiate in the best interests of the buyer; 

(7) the possibility that a dual agency may arise in a real estate transaction and the options that would become available to the buyer and seller or lessee and lessor; and 

(8) that any complaints concerning a licensee may be filed with the Commission. 

The Touring Agreement doesn’t include any of this information. The Touring Agreement is not a “brokerage agreement” under Maryland law, nor is it a legally compliant disclosure to an unrepresented buyer. Remember that Maryland law requires a written brokerage agreement before providing real estate brokerage services to a client.  

To review our blog, “The Best Buyers’ Agents Follow Maryland Law,” please click here

It is our strong recommendation that you enter into a written buyer agency agreement, compliant with Maryland law and consistent with the NAR Settlement Agreement, prior to showing a home to a buyer. Please speak with your Broker, Office Manager, or Team Leader if you have any questions.  

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