Who Does Your Home Real Estate Agent Really Work For?
If you are thinking of buying a new home, it is in your best interest to
know the difference between seller, buyer and dual real estate agents. Using
the wrong style of agent could affect the financial terms of the deal and have
material legal implications. Read on to arm yourself with an understanding of
the difference and how to use it to your advantage when buying a home.
There has been frequent discussions over the past couple of years about
buyer's agents and seller's agents. Real estate law now obligates an agent to
indicate who they are representing. This is normally done when you first meet
with an agent through a written disclosure document that you must sign that
identifies whether the agent is working for the buyer or seller. A seller's
agents represent the seller. Most real estate agents who show and market
houses are seller's agents. They may be friendly to you as a potential buyer,
show you multiple homes and help you prepare an offer on a home. However, the
agent is typically working for the seller and looking out for the interests of
the seller. On the other hand, buyer's agents actually work for the buyer and
have an obligation to look out for the interests of the buyer. There are also
dual agents, but we’ll come back to that in a moment.
More often than not, this has little to do with who actually pays the agent.
So, why does it matter? If you are the buyer, it is important for you to use a
buyer agent because of the financial, legal and ethical implications. A
seller's agent has a fiduciary alignment to the seller not to you as the
buyer. Accordingly,during the negotiations a seller's agent will be aligned
with the seller. Here's a real life case in point to help clarify. Suppose an
agent realizes that the seller must relocate for a new job, has become highly
motivated and is now willing to accept $25,000 under the home's list price. If
the agent is a buyer's agent - working for you - he/she will be obligated and
very likely excited to tell you this information. However, if the agent is the
seller's agent aligned with the seller - he/she does not have to disclose this
news to you and may not tell the essential fact initially in an effort to get
the higher offer from you.
Now, back to dual agents. Every so often your will find an agent that says
they are performing in a dual role; meaning they are serving as a buyer and
seller agent. Be careful in this situation. As a buyer you may want to stay
clear of a dual agent. Realistically, the dual agent is unable to fully
negotiate the buyer's interests without adversely affecting the seller and
visa versa. There are some admirable agents that can operate effectively in
the dual role. However, as a buyer, you should be conscious of the prospective
conflict. If you want the bottom price on a home, seek a reliable buyer's
agent whose loyalties are aligned wholly with you.
You may be wondering who actually pays for a buyer's agent. Typically the
selling agent lists the house in the MLS ("multiple listing
service") and agrees to split the commission with the agent who brings
the buyer. Frequently, the seller's agent and the buyer's agent split the real
estate commission with fifty percent for each agent. This means that although
the buyer's agent is representing for you, the seller is funding the
commissions to the buyer's agent. At times you may find a house where the
selling agent does not agree to split the commission with the agent who brings
the buyer and in that case you will have to settle on who will pay for the
buyer's agent.
Knowing the financial, legal and ethical implications of buyer, seller and
dual agents is important to you as a home purchaser. Prior to engaging in any
real estate transaction as the home buyer, find yourself a good buyer's agent
with at least 10-12 years of experience in your market. They will have a
fiduciary responisibility to act in your best interest and have the experience
to help you negotiate the lowest price for the home.
Article Source: http://www.articlesnatch.com
About the Author:
Kristi Cole is a real
estate and home
improvement expert at www.inhomeimprovements.com
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