Consumer Notice

THIS IS NOT A CONTRACT

Pennsylvania Law requires real estate brokers and salespersons (licensees) to advise consumers of the business relationships permitted by the Real Estate Licensing and Registration Act. This notice must be provided to the consumer at the first contact where a substantive discussion about real estate occurs.

Before you disclose any information to a licensee, be advised that unless you select an agency relationship by signing a written agreement providing for such a relationship, the licensee is NOT REPRESENTING YOU. A business relationship of any kind will NOT be presumed but must be established between the consumer and the licensee.

Any licensee who provides you with real estate services owes you the following duties:

• Exercise reasonable professional skill and care which meets the practice standards required by the Act.
• Deal honestly and in good faith.
• Present, in a timely manner, all offers, counteroffers, notices, and communications to and from the parties in writing. The duty to present written offers and counteroffers may be waived if the waiver is in writing.
• Comply with the Real Estate Seller Disclosure Act.
• Account for escrow and deposit funds.
• Disclose all conflicts of interest in a timely manner.
• Provide assistance with document preparation and advise the consumer regarding compliance with laws pertaining to real estate transactions.
• Advise the consumer to seek expert advise on matters about the transaction that are beyond the licensee's expertise.
• Keep the consumer informed about the transaction and the tasks to be completed.
• Disclose financial interest in a service, such as financial, title transfer and preparation services, insurance, construction, repair or inspection, at the time service is recommended or the first time the licensee learns that the service will be used.

A licencee may have the following business relationships with the consumer:

Seller Agency:

Seller agency is a relationship where the licensee, upon entering into a written agreement, works only for a seller/landlord.

Seller's agents owe the additional duties of:

• Loyalty to the seller/landlord by acting in the seller's/landlord's best interest.
• Confidentiality, except that a licensee has a duty to reveal known material defects about the property.
• Making a continuous and good faith effort to find a buyer for the property, except while the property is subject to an existing agreement.
• Disclosure to other parties in the transaction that the licensee has been engaged as a seller's agent.

A seller's agent may compensate other brokers as subagents if the seller/landlord agrees in writing. Subagents have the same duties and obligations as the seller's agents.

If you enter into a written agreement, the licensees in the real estate company owe you the additional duties identified above under seller agency. The exception is designated agency. See the designated agency section in this notice for more information.

Buyer Agency:

Buyer agency is a relationship where the licensee, upon entering into a written agreement, works only for a buyer/tenant.

Buyer's agents owe the additional duties of:

• Loyalty to the buyer/tenant by acting in the buyer's/tenant's best interest.
• Confidentiality, except that a licensee is required to disclose known material defects about the property.
• Making a continuous and good faith effort to find a property for the buyer/tenant, except while the buyer/tenant is subject to an existing contract.
• Disclosure to other parties in the transaction that the licensee has been engaged as a buyer's agent.

A buyer's agent may be paid fees, which may include a percentage of the purchase price, and, even if paid by the seller/landlord, will represent the interests of the buyer/tenant.

If you enter into a written agreement, the licensees in the real estate company owe you the additional duties identified above under buyer agency. The exception is designated agency. See the designated agency section in this notice for more information.

Dual Agency:

Dual agency is a relationship where the licensee acts as the agent for both the seller/landlord and the buyer/tenant in the same transaction with the written consent of all parties.

Dual agents owe the additional duties of:

• Taking no action that is adverse or detrimental to either party's interest in the transaction.
• Making a continuous and good faith effort to find a buyer for the property and a property for the buyer, unless either are subject to an existing contract.
• Confidentiality, except that a licensee is required to disclose known material defects about the property.

Designated Agency:

In designated agency, the employing broker may, with your consent, designate one or more licensees from the real estate company to represent you. Other licensees in the company may represent another party and shall not be provided with any confidential information. The designated agent(s) shall have the duties as listed above under seller agency and buyer agency.

In designated agency, the employing broker will be a dual agent and have the additional duties of:

• Taking reasonable care to protect any confidential information disclosed to the licensee.
• Taking responsibility to direct and supervise the business activities of the licensee who represent the seller and buyer while taking no action that is adverse or detrimental to either party's interest in the transaction.
• The designation may take place at the time that the parties enter into a written agreement, but may occur at a later time. Regardless of when the designation takes place, the employing broker is responsible for ensuring that confidential information is not disclosed.

Transaction Licensee:

A transaction licensee is a broker or salesperson who provides communication or document preparation services of performs other act for which a license is required WITHOUT being the agent or advocate for either the seller/landlord or the buyer/tenant.

Upon signing a written agreement or disclosure statement, a transaction licensee has the additional duty of limited confidentiality in that the following information may not be disclosed:

• The seller/landlord will accept a price less than the asking/listing price.
• The buyer/tenant will pay a price greater than the price submitted in a written offer.
• The seller/landlord or buyer/tenant will agree to financing terms other than those offered.

Other information deemed confidential by the consumer shall not be provided to the transaction licensee.

OTHER INFORMATION ABOUT REAL ESTATE TRANSACTIONS

The following are negotiable and shall be addressed in an agreement/disclosure statement with the licensee:

• The duration of the employment, listing agreement or contract.
• The fees or commissions.
• The scope of the activities or practices.
• The broker's cooperation with other brokers, including sharing of fees.

Any sales agreement must contain the zoning classification of a property except in cases where the property is zoned solely or primarily to permit single family dwellings.

A Real Estate Recovery Fund exists to reimburse any person who has obtained a final civil judgment against a Pennsylvania real estate licensee owing to fraud, misrepresentation, or deceit in a real estate transaction and who has been unable to collect the judgment after exhausting all legal and equitable remedies. For complete details about the Fund, call 717- 783-3658.

For more information, email us or call us at 215-576-8666.

Tax Considerations >Taxpayer Relief Legislation included in the 1997 federal budget made significant changes that improve a homeowner's ability to profit from the sale of real estate. The capital gains tax exclusions on the sale of a principal residence is just one of several benefits for homeowners. When you sell a home you have owned and use for two of the five years prior to the sale, married couples are allowed to keep up to $500,000 in tax-free profits and taxpayers filing as singles can keep up to $250,000 before paying capital gains tax. Long-term capital gain is also taxed at lower rates as a result of the Jobs and Growth Tax Relief Reconciliation Act passed in 2003. The maximum capital gains tax rates dropped from 20% to 15% and from 10% to 5%, effective for sales and exchanges taking place on or after May 6, 2003 and through December 31, 2007. In 2008 the 15% rate continues for higher income taxpayers, while the 5% rate for lower income taxpayers drops to 0%, but only for the 2008 tax year. On January 1, 2009, the 10% and 20% rates will be reinstated. Consult your tax advisor for advice regarding your particular circumstance. See All Tips In The "Tax Considerations" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

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