When buying
real estate, you may have several choices as to how you want a
real estate firm and its agents to work with you. For example,
you may want them to represent only you (as a buyer's
agent). You may be willing for them to represent both
you and the seller at the same time (as a dual agent).
Or you may agree to let them represent only the seller (seller's
agent or subagent). Some agents will offer you a choice of these
services. Others may not.
Buyer's Agent
Duties to Buyer:
If the real estate firm and its agents represent you, they must:
- promote
your best interests
- be loyal
to you
- follow
your lawful instructions
- provide
you with all material facts that could influence your decisions
- use reasonable
skill, care and diligence, and
- account
for all monies they handle for you.
- Once you
have agreed (either orally or in writing) for the firm and its
agents to be your buyer's agent, they may not give any confidential
information about you to sellers or their agents without your
permission. But until you make this agreement with your buyer's
agent, you should avoid telling the agent anything you would
not want a seller to know.
Unwritten
Agreements:
To make sure that you and the real estate firm have a clear understanding
of what your relationship will be and what the firm will do for
you, you may want to have a written agreement. However, some firms
may be willing to represent and assist you for a time as a buyer's
agent without a written agreement. But if you decide to make an
offer to purchase a particular property, the agent must obtain
a written agency agreement. If you do not sign it, the agent can
no longer represent and assist you and is no longer required to
keep information about you confidential. Furthermore, if you later
purchase the property through an agent with another firm, the
agent who first showed you the property may seek compensation
from the other firm.
Be sure to read and understand any agency agreement before you
sign it.
Services and Compensation:
Whether you have a written or unwritten agreement, a buyer's agent
will perform a number of services for you.
These may include helping you:
- find a
suitable property
- arrange
financing
- learn more
about the property and
- otherwise
promote your best interests.
If you have
a written agency agreement, the agent can also
help you prepare and submit a written offer to the seller.
A buyer's agent can be compensated in different ways. For example,
you can pay the agent out of your own pocket. Or the agent may
seek compensation from the seller or listing agent first, but
require you to pay if the listing agent refuses. Whatever the
case, be sure your compensation arrangement with your buyer's
agent is spelled out in a buyer agency agreement before you make
an offer to purchase property and that you carefully read and
understand the compensation provision.
Dual
Agent
You may permit an agent or firm to represent you and the seller
at the same time. This "dual agency relationship" is
most likely to happen if you become interested in a property listed
with your buyer's agent or the agent's firm. If this occurs and
you have not already agreed to a dual agency relationship in your
(written or oral) buyer agency agreement, your buyer's agent will
ask you to sign a separate agreement or document permitting him
or her to act as agent for both you and the seller. It may be
difficult for a dual agent to advance the interests of both the
buyer and seller. Nevertheless, a dual agent must treat buyers
and sellers fairly and equally. Although the dual agent owes them
the same duties, buyers and sellers can prohibit dual agents from
divulging certain confidential information about them to the other
party.
Some firms also offer a form of dual agency called "designated
agency" where one agent in the firm represents the seller
and another agent represents the buyer. This option (when available)
may allow each "designated agent" to more fully represent
each party.
If you choose the "dual agency" option, remember that
since a dual agent's loyalty is divided between parties with competing
interests, it is especially important that you have a clear understanding
of:
- what your
relationship is with the dual agent and
- what the
agent will be doing for you in the transaction.
This can best
be accomplished by putting the agreement in writing at the earliest
possible time.
Seller's Agent Working With a Buyer
If the real estate agent or firm that you contact does not offer
buyer agency or you do not want them to act as your buyer agent,
you can still work with the firm and its agents. However, they
will be acting as the seller's agent
(or "subagent"). The agent can still help you find and
purchase property and provide many of the same services as a buyer's
agent. The agent must be fair with you and provide you with any
"material facts" (such as a leaky roof) about properties.
But remember, the agent represents the seller-not you- and therefore
must try to obtain for the seller the best possible price and
terms for the seller's property. Furthermore, a seller's agent
is required to give the seller any information about you (even
personal, financial or confidential information) that would help
the seller in the sale of his or her property. Agents must tell
you in writing if they are sellers' agents before you say anything
that can help the seller. But until you are sure that an agent
is not a seller's agent, you should avoid saying anything you
do not want a seller to know.
Sellers' agents are compensated by the sellers.
