Real Estate Representation
What’s the difference between a Buyer’s Agent and a Seller’s Agent?
Traditionally, all agents involved in a real estate transaction legally represent the Seller (both the “Listing Agent” and the “Selling Agent.”) When a Buyer’s Agent is involved, the person buying the property is represented by the “Selling Agent,” who is known as the “Buyer’s Agent.”
How does a Buyer’s Agent get paid?
The Buyer’s Agent gets paid with commissions that come from one of two places:
- Out of the total commission being paid to the listing agency, or
- As a reduction in the selling price equivalent to the Buyer’s Agency commission, thus enabling a direct payment from the Buyer to the Buyer Agency. Typically, the Buyer’s Agency Commission is paid from the proceeds of the closing.
What will it cost me?
No additional cost! In fact, a Buyer’s Agent can save you money by being able to negotiate with the Seller and Selling Agent to work toward obtaining the lowest price and best terms for you, the Buyer.
Why the Change?
In the mid-1980’s, state licensing officials and trade organizations began questioning certain practices within the real estate industry. As a result, agents were required to reveal which party they were representing. Buyers began requesting equal representation.
What are the Benefits of Buyer’s Agency?
- Advise and counsel a Buyer with unrestricted assistance.
- Prepare an estimate of value and future salability to insure the true value of the property.
- Investigate any situation that might jeopardize the best interest of the Buyer.
- Negotiate with the Listing Agent and Seller to obtain the lowest price.
- Show all properties on the market, regardless of whether they are listed with Multiple Listing Service.
Is there a Contract for Buyer’s Agency?
Yes, a Buyer Agency Contract creates legal “fiduciary” responsibilities between the Buyer and the Agent. These responsibilities include:
- Full disclosure of useful information.
- Accounting on all matters.
- Confidentiality in all matters.
- Obedience to Buyer’s needs.
- Negotiating the best price for the Buyer.
- Reasonable Care to Buyer’s needs.
- Loyalty between the Agent and the Buyer.
The Competitive Edge
A Buyer’s Agent is able to show properties that are not listed in the Multiple Listing Service. This allows you to have a greater selection to choose from. If an inspection reveals a problem, a Buyer’s Agent can make a crucial difference. He or she protects the Buyer’s interests and helps negotiate a fair and equitable agreement for the property. Legally, a Buyer’s Agent is obligated to provide complete confidentiality of the Buyer’s personal motives and financial intentions. Without this confidential duty, a Seller might gain a competitive bargaining edge.