- In the market to purchase property or a home? Do you have an agent representing you as a buyer? As a buyer in the real estate market it is essential to have a qualified buyer’s agent represent you and protect your best interests, whether you are purchasing an existing home listed for sale by another agent, purchasing a lot for sale, or looking to build or purchase from a new home builder. A good real estate agent does a lot more than just find a property for you and open doors. They provide professional representation and expertise to get you through the sometimes complicated negations that follow an offer to purchase. Here are 5 fast facts about buyer agency that can help you decide if you need a buyer’s agent:
- A buyer’s (aka selling agent) agent is a real estate agent that has a fiduciary duty to represent the interests of the buyer. A seller’s agent (aka listing agent) has a fiduciary duty to represent the interests of the seller.
- In simple terms, Fiduciary means involving TRUST. When we refer to the fiduciary responsibilities an agent has to a buyer or seller we refer to the duties of care, confidentiality, loyalty, obedience, full accounting, and full disclosure that agent owes his or her client.
- So what does all this fiduciary business mean? It means that the listing agent (or new homes salesperson) has a duty to look out for the best interests of the seller (or builder) they are representing. A lot of new home buyers walk into builder model homes without representation. Don’t get me wrong, builders and their sales reps aren’t necessarily bad people. New home salespeople do a good job selling homes and have a duty to look out for the interests of their builder, not yours. A buyer’s agent has a duty to look out for your best interest if they are representing you. Not to mention that builders not only pay commissions to realtors representing new home buyers, they often offer bonuses on top of commissions to realtors because they want more buyer business. So bringing a real estate agent on to represent your new construction purchase brings benefits to all parties.
- If you are working towards a purchase without your own buyer’s agent please understand that the listing agent (or builder salesperson) has an obligation to disclose anything you say or do that could help the seller or builder they represent. If you are okay with that you might be ready for Dual Agency. Not okay? Then you need to get your own agent to represent you independently from the seller or builder as a buyer.
- What is this Dual Agency business? Dual agency means the agent is representing both the buyer and the seller. In most states this type of agency requires written disclosure and acceptance by both the buyer and seller agreeing to representation by the same agent. Essentially both parties to the sale are agreeing to forgo the duties of full disclosure and undivided loyalty. The agent will fill out the necessary paperwork and provide necessary comps to both sides while providing both parties with duties of obedience, confidentiality, and full accounting. As a real estate agent I’ve represented both the buyer and the seller multiple times through disclosed dual agency with written consent from both parties. Real estate agents often love and benefit from dual agency by receiving double the commission. Please understand that for the purposes of this post I’m referring directly to the type of dual agency created when an individual agent represents both the buyer and the seller on the purchase and sale of the same property. Another type of dual agency called Broker Dual Agency is common and created when the listing and buyer agents are both part of the same brokerage company (for example both agents work for the same Coldwell Banker or Remax or independently owned firm).
I hope this post has been valuable and helps you decide if you need buyer representation in the future.
P.s. I’m a licensed Broker Associate with Coldwell Banker Alfonso Realty. If you’re looking for property on the Mississippi Gulf Coast I’d love to be your realtor! I can also refer you to the most qualified agents in this growing global market. Please share your buying experiences in the comments and contact me with any questions.