Pennsylvania law concerning ACT 112

This is for informational purposes only!

IT'S THE LAW... (PA)

After November 25, 1999, real estate sales/leasing professionals (licensees) in Pennsylvania will be required to disclose to consumers of real estate who they represent the following...

This new "Agency" disclosure notice helps consumers by clarifying up front and in writing who works for whom in a real estate transaction and letting consumers know what options are available. Pennsylvania joins 47 other states in clarifying agency relationships between consumers and real estate practitioners.

The new law is beneficial in that it requires clear and timely disclosure in the form of a written notice that a consumer is to receive at the initial contact. This notice will enable buyers, sellers, lessors and lessees to make informed decisions.

Under the new law, all licensed real estate sales/leasing professionals (licensees) may serve consumers in the following relationships:

Seller Agency - in this relationship, the licensee works only for the seller, owing the seller client loyalty, confidentiality and a good faith effort to find a buyer of the property.
Buyer Agency - in this relationship, the licensee works only for the buyer, owning the buyer client loyalty, confidentiality and a good faith effort to find a property for the buyer.
Dual Agency - in this relationship, the licensee acts as the agent for both the seller and the buyer in the same transaction, with the consent of all parties. Real estate companies have buyer and seller clients; it is not always possible to predict when a buyer client will choose to buy a property from a seller client. While this may put the agent in the middle, it does assure that sellers have the greatest exposure for their properties and that buyers can make selections from the entire market. A dual agent must provide services fairly without promoting either party's interests over the other.
Designated Agency - created for the in-house transaction where both buyer and seller are represented by individual agents in the same company. It allows the agent selected by the buyer to continue representing the buyer's interest while the agent selected by the seller continues to represent the seller's interests. This allows the consumers to retain services they sought when choosing real estate agents to advocate for them.
Transaction licensee - in this relationship, the licensee provides communication or document preparation services, or similar real estate related services without being an agent or advocate for either the seller or the buyer. A transaction licensee could not disclose the fact that the seller will accept a price less than the asking price, or any other information deemed confidential by the consumer.

IF YOU ARE A CONSUMER SEEKING REAL ESTATE SERVICES, WHAT DOES THIS MEAN TO YOU? FIRST, YOU CAN EXPECT TO SIGN THE CONSUMER NOTICE FORM, WHICH OUTLINES YOUR OPTIONS FOR REPRESENTATION. IN REQUESTING THE SIGNED FORM, LICENSED REAL ESTATE PROFESSIONALS ARE DOING THEIR JOB AND FULFILLING THE REQUIREMENTS OF THE LAW. EVEN IF YOU ARE ATTENDING OPEN HOUSES, YOU WILL BE ASKED TO SIGN THE FORM.

THE FORM IS NOT A CONTRACT AND DOES NOT COMMIT THE CONSUMER TO ANY RELATIONSHIP. ONCE YOU SELECT THE RELATIONSHIP YOU NEED OR DESIRE, YOU WILL SIGN ANOTHER FORM INDICATING YOUR PERMISSION FOR SUCH A RELATIONSHIP AND THE DUTIES OWED TO YOU.

Consumers can direct questions to their real estate agent. More information is also available on PAR's Web Site: www.parealtor.org

The Pennsylvania Association of REALTORS® (PAR) supported the Agency Disclosure Bill, which passed unanimously in both the Pennsylvania House and Senate before becoming a law. PAR is a 26,000-member professional association serving the Pennsylvania real estate industry. Members of the REALTOR® organization at the local, state and national levels are privileged to use the REALTOR® designation, which distinguishes them from non-member brokers and salespersons and indicates that they subscribe to a strict Code of Ethics.

CLICK HERE FOR THE CONSUMER NOTICE THAT WILL BE REQUIRED TO SIGN WHEN BUYING, SELLING,
RENTING OR LEASING.

WARNING!

HVCC & YOU!

On May 1, 2009 the HVCC was initiated throughout the Country on every mortgage transaction that involves an appraisal that is sold to Fannie Mae and Freddie Mac. This involves all conventional loans which prior to the present meltdown was approximately 70% of all lending. With the banking system crippled, conventional loans seized up and nearly came to a halt. Presently, the conventional mortgage market is still trying to get back on its feet albeit very slowly and cautiously. Then there is the HVCC.

The HVCC came about due to pressure put on an appraisal management company called eAppraiseIT by a large mortgage lender Washington Mutual in the State of New York. The Attorney General of New York created the HVCC. To stay out of litigation (even though not directly involved), the appellant in the case (The State of New York) arranged to have Fannie Mae (FNMA) sign an agreement that all loans placed through FNMA & Freddie Mac would have to adhere to this new HVCC.

“We knew this was causing extreme hardship to the industry, but we didn’t expect to get thousands of horror stories from would-be homebuyers whose dreams have been dashed by this well-intended, but misguided policy. Every day thousands of people are getting the rug yanked out from under them in their quest to become homeowners because of HVCC. You only need to go to our petition website to read the stories for yourself,” said Kearns.