Q: My husband and I found our home by visiting an open house. We love the home and the seller?s agent. Should we get a buyer?s agent or can we work with the seller?s agent?
?LBR, Elkridge, MD
A: The Seller?s agent is working for the seller. That agent is trying to get the most money for the seller. A buyer agent will try to get you in for the least amount of money and will keep everything you say confidential. If you work with the seller?s agent and some do, that agent cannot provide undivided loyalty! That agent cannot help you with price. Has the seller agent offered a buyer agent to help? It?s up to you! Good luck.
Noreen Parrell is a Realtor? with Better Homes and Gardens Rand Realty in Briarcliff, NY.
A: You can work with the seller?s agent, but be aware that the agent may not necessarily be working in your best interests. By definition, a seller?s agent has a fiduciary obligation to get the best price and terms for the seller. As a result, you may end up paying more for the home than you would if you had your own agent representing your best interests. On the other hand, since the seller?s agent is apparently the ?procuring cause,? he/she may not be obligated to pay your agent?s fee. As a result of that, you could end up paying your agent out of pocket. For future reference, the best scenario for a buyer is to hire a buyer?s agent before looking at homes.
Phil Lunnon is a Realtor? with Lunnon Realty in Lakewood, CO.
A: Do yourself a favor and hire your own agent to represent you. Buyers and sellers are sometimes confused about the role of a real estate agent in their transaction. They may not understand exactly who the agent represents and real estate agency (Broker) relationship. Many states demand that agents give buyers and sellers an ?Agency Disclosure? form to sign up front before a transaction is started or offer is written. This form is not a contract or an agreement, it simply disclosures the various types of possible agency relationships that may exist. It is very important that you read the disclosure to better understand it and all that is involved in ?Agency?. In this way you will be able to determine what type of agency relationship will work best for you.
Single Agency vs. Dual Agency Generally, buyers agents who represent buyers are operating in a single agency capacity as a buyer?s agent and seller?s agents who represent sellers are operating in a single agency capacity as a listing agent. Agents who represent clients under single agency owe a ?fiduciary responsibility? to their client. Agents are not allowed to share confidential information with the other party or the other party?s representative. Single agency agents are bound to use care and due diligence while performing their duties, disclose all material facts and above all be honest. Buyer?s agents and the buyer sometimes sign a buyer?s broker agreement, which lays out the duties and obligations of the agent. In some states, if buyers do not sign a buyer?s broker agreement with the agent, that agent does not represent the buyer but instead becomes a sub-agent of the seller. Sub-agents owe the same duties to the seller as the listing agent. Seller?s agents and the seller sign a listing agreement, which also lists the duties and obligations of the agent. Both listing agents and buyer?s agents owe the client loyalty, confidentiality, accountability and honesty. Some agents work as buyer?s agent with buyers and as a seller?s agent with sellers, (both sides of the fence) and some agents work solely as exclusive buyer?s agents and don?t take listings.
Dual Agency With Two Agents Because all real estate agents are licensed under a real estate broker, it is possible to work with one agent who is licensed by the same broker as the listing agent. This situation creates a dual agency. The agents could work at separate offices and be strangers to each other, but since they are licensed by the broker, they are still operating under dual agency if one agent represents the buyer and the other represents the seller. When first representing a new client an agent probably entered into a single agency relationship with their buyer. However, when the buyer chooses a home listed by that agent?s broker, the agent?s relationship with the buyer changes. Not all single agents make a point of informing their buyer of the change. The listing agent must also inform their seller of the newly created agency relationship as well. Remember, transparency is key. Dual agency must be agreed to in writing by both the buyer and the seller.
Be careful, laws vary from state to state. In California where I am licensed, exclusive buyer broker agreements contain language that allows dual agency, so most buyers don?t realize their buyer?s broker may be subject to dual agency. A listing agent who also represents the buyer is also a dual agent. When this occurs, the dual agent cannot operate in a fiduciary relationship with either party and must now treat both sellers and buyers with equal diligence. While they now cannot share confidential information, they are still able to give confidential advice to both parties.
Some buyers prefer to work solely with listing agents because they know the agent is receiving both the buyer and seller side of the commission. They think that the listing agent is more motivated to get an offer accepted when the buyer makes a purchase offer through the listing agent. They also may think that the dual agent might agree to further negotiate their real estate commission to increase the seller?s profit in hopes of getting their lower offer accepted.
I?ll always remember my first transaction. After signing up with the seller as their listing agent I proceeded to write an offer from a buyer visiting my first open house. I instantly became a dual agent. I managed to close a very lucrative deal in about 60 days with a very understanding seller and a buyer who thought they were making the best possible decision to have me represent them.
Personally I?ll never understand the thinking of buyers and sellers who freely fall into dual agency at the blink of an eye. To me it?s like hiring your wife?s divorce lawyer to represent you in the proceedings. But that?s just me.
Lee Dworshak is a Realtor? with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.
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Related posts:
- What Are The Advantages And Disadvantages Of Working With The Seller?s Agent To Buy A Home?
- Does The Buyer?s Agent Have A Right To Commission?
- Can A Listing Agent Be A Buyer?s Realtor?
- Did I Make A Mistake By Hiring A Dual Agent?
- Does The Buyer Have To Work With The Listing Agent?
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