What Buyer’s Want and Need to Know

It's Alabama Law

It seems I’ve opened a can of worms already talking about the dangers a buyer of real estate in Alabama faces. You might want to review some of my previous blogs such as “Meaningful Conversations for Alabama Realtors,” or “Establishing Relationships,” or “Just Tell it like it is.”  In all these blogs I explained the importance of disclosing the fact that Alabama is a Caveat Emptor state which places all the responsibility for detecting possible deficiencies in a property prior to closing. All real estate practitioners know the meaning but many don’t seem to understand the impact it has on their clients.

For many years consumers who are buying real estate have asked the question, “Who represents us, and who represents the seller?”  The National Association of Realtors has surveyed thousands of buyers and sellers to determine their satisfaction with representation by a Realtor. By far, buyers are most dissatisfied because it seems everybody represents the seller and no one wants to represent the buyer. Representation can’t be mandated on the National level due to variances in state laws. Since my job is educating people about real estate, primarily in Alabama, and since I live and work in Alabama, this article will be specific to our state.

Alabama law requires….

all real estate licensees to disclose the various ways a consumer can be represented by an agency as early as reasonably possible. This should be done upon initial contact between the agent and consumer. However, in many cases it’s not done until later in the relationship and by then the damage might already be in place. I don’t know if some agents are afraid to disclose this information or just know understand it well enough to explain to other people. In either case, non-disclosure can be very damaging to the consumer.

Buyers want and need to know……

any and everything that could affect them financially when buying or selling real estate. I think the best way to convey the importance of this disclosure is through demonstration. If a new lead had contacted me about a property from seeing my sign placed on the property, I might say something like this; (this could be used to RECAD someone via e-mail as well)

Script for disclosure

Mr. Buyer, I don’t mean to frighten you but buying real estate in Alabama is different than almost all other states and you need to be aware of the laws that could affect you financially. Alabama Statutory Law requires all real estate agents to disclose critical facts to all consumer’s that are contemplating buying or selling real estate located in Alabama. First of all, Alabama is a Caveat Emptor State which  places total responsibility on the buyer when purchasing real estate located in Alabama. The State understands the magnitude of the responsibility placed on the buyer to search out all facts about a particular property (s) prior to writing an offer. Likewise, the State understands that all consumers have a legal right to be represented by a professional, licensed real estate agent when buying or selling real estate in Alabama.

 RECAD Script

Alabama Law also requires all real estate agents to disclose the various agency relationships that are available to all consumers at their earliest convenience; especially before any confidential information is shared.

There are only four ways a Realtor® can work with a consumer; which are as follows:

A Single Agent is a licensee who represents only one party in a sale. That is, a single agent represents his or her client. The client may be either the seller or the buyer. A single agent must be completely loyal and faithful to the client.

A Subagent is another agent/licensee who also represents only one party in a sale. A subagent helps the agent represent the same client. The client may be either the seller or the buyer. A subagent must also be completely loyal and faithful to the client. (Please note that our firm does not offer “Sub-Agency” except as it relates to the use of the Multiple Listing Service.)

A Limited Consensual Dual Agent is a licensee for both the buyer and the seller. This may only be done with the written, informed consent of all parties. This type of agent must also be loyal and faithful to the client, except where the duties owed to the clients conflict with one another.

A Transaction Broker assists one or more parties, who are customers, in a sale. A transaction broker is not an agent and does not perform the same services as an agent.

       *Alabama law imposes the following obligations on all real estate licensees to all parties, no matter their relationship:

  1. To provide services honestly and in good faith;
  2. To exercise reasonable care and skill;
  3. To keep confidential any information gained in confidence, unless disclosure is required by law or duty to a client, the information becomes public knowledge, or disclosure is authorized in writing;
  4. Present all written offers promptly to the seller;
  5. Answer your questions completely and accurately.

Further, even if you are working with a licensee who is not your agent, there are many things the licensee may do to assist you. Some examples are:

  1. Provide information about properties;
  2. Show properties;
  3. Assist in making a written offer;
  4. Provide information on financing.

You should choose which type of service you want from a licensee, and sign a brokerage service agreement. If you do not sign an agreement, by law the licensee working with you is a transaction broker.

This is not a contractual agreement. It is simply a State required disclosure of possible agency relationships that are available to you. Would you please acknowledge that I have disclosed this information to you by signing and returning this document to me.

Name of licensee:                                                                           Date:

Consumer name:                                                                             Date:

 Cushion the fear

Once again disclosing this information is not meant to frighten nor discourage you. This process is required by Alabama Law. It is to your best financial interest that you are represented by an agent when buying or selling real estate in Alabama.  If you elect to work with several agents rather than one particular agent, Alabama law prohibits disclosure of certain confidential information that could be crucial to you.

I would be extremely happy to explain these agency relationships to you in greater detail. I would greatly appreciate the opportunity to share the advantages of working with our agency. If you are interested in setting a time for this discussion, please click on the link below.


Hopefully this will help you see just how simple it is to inform a buyer of issue that can directly affect his financial well being. At least they will be in a better position to make a decision that best suits their best needs. If they decide not to be represented by a Realtor, at least you the agent has fulfilled your legal responsibilities and they will hold up in a court of law.

Do you have request?

 Should you have specific questions concerning various issues, please let me know and I’ll research the answer for you. I also want to encourage you to subscribe to our “News & Updates” weekly report so you can stay abreast of issues that might affect you when buying or selling real estate. If you haven’t visited my website, please go to www.AlabamaRealEstateInstitute.com  and view previous articles.