This month I decided to share a common mistake found on 90% of transactions: Agency Disclosure.
As you know Agency is disclosed in the very beginning. Typically, the agent has the principle sign the CAR AD form at the time a listing agreement is signed OR at the time an offer is being written, depending on what side of the contract you're on. However, this form should be signed as soon as you engage in "Real Estate" talk, contract or no contract.
Just recently, I had a transaction where we had to clarify the rules of Agency.
CAR Legal confirmed 3, yes 3, AD forms are required on every file:
-one signed by the listing agent and seller
-one signed by the buyer's agent and buyer
-and one signed by the buyer's agent and seller
These must be 3 separate forms entirely. The buyer's agent can not merely acknowledge the AD form already signed by the listing agent/seller, which is how it's done most of the time, if done at all.
The PRDS version of the form is much different. It provides a signature line for the third party to acknowledge on the same copy. So in the PRDS scenario, you will essentially have only 2 forms:
-one between the seller and listing agent, with a line for the buyers agent to acknowledge.
-and one between the buyer and buyer's agent, with a line for the seller to acknowledge.
I know we all wish there were one form, for all parties to sign, to make things easier. But until then, it's best to be clear on the rules to ensure a well documented file.
