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| If you are considering buying a home, you may be interest
in understanding agency laws and how they may affect you It is important
for you, as a buyer, to understand where an agent's fiduciary responsibilities
lie. Many people are surprised to find out that unless otherwise abdicated,
an agents loyalty lies, with the seller, no matter which brokerage firm
has the contract for the listing of the property. That's right, that agent
that has driven you from house to house, spent endless hours showing you
property and become your confidant, doesn't work for you unless, you've
explicitly contracted him/her to do so. By law, a real estate agent must
disclose to you where his or her loyalty lies before any negotiation takes
place. Being informed about agency law and your choices will help you make
the decision about which type of agency representation you require. Until the last few years, a buyer did not have a choice in his type of agency representation. By Law an agent automatically worked for the seller thus the term "Seller's Agent" or "Listing Agent". A Seller's Agent'' is employed by and represents only the seller in a transaction. The listing agreement serves as a contract between the seller and the agent, and spells out how the seller's agent will be paid. Responsibilities of a sellers agent include getting the highest purchase price and best terns possible for the seller. So far, pretty simple to understand, right? Okay, now follow me with this, because here's where it gets a bit confusing. When a home is listed with a real estate brokerage firm, each agent that represents that firm is automatically obligated, by virtue of the listing contract with the brokerage find, to represent the seller's best interest in any negotiations for the property. Sounds logical so far, but there's more. By association with the Multiple Listing Service, a service which most Realtors belong to, any agent from any other brokerage firm which negotiates a sale for the property is a subagent of the agent who represents the seller. Therefore the subagent, like the seller's agent, represents the seller during negotiations and is responsible for getting the best terms possible for the seller. This is true even if the subagent is first contacted by a potential buyer and works hard to help the buyer find the right home to purchase. "Before, agency was simple to understand. As a real estate agent, we always represented the seller," says Maria Vicknair, BRC, a Realtor with Later & Blum. "Because of changing agency laws, and growing buyer awareness, more and more buyers are asking for their own representation in what is probably one at the biggest decisions they'll make in their lives. "The only way that agent can represent the buyer in the purchasing process is to become a "Buyers Agent" by contract. A real estate agent who is employed by and represents only the buyer is a 'buyer's agent." The agreement between the buyer and the buyer's agent serves as a contract between them and typically spells out the agent's duties and how the will be paid. The buyer's agent may be paid by the seller through a commission split with the listing agent or paid by a sales commission by the buyer. In addition to helping the buyer with the house hunting process, the responsibilities of a buyer's agent - unlike those of the seller's agent or subagent - include negotiating the best price and terms for the buyer. "Many agents, like myself have gone through extensive training to become certified in Buyer Representation'', explains Vicknair. "I feel it is not only important to the buyers that I work with, but also to the sellers that I work for, that I be as informed as possible on agency law". The designation BRC behind a Realtor's name indicates that he/she is certified in buyer representation. "The benefits of a buyer using an agent certified in Buyer Representation are obvious, but there are also benefits for the seller in using a BRC when listing your home" says Maria. "When you hire someone to market your home for sale, you want someone who is fully educated on all matters which affect the possible sale of your home. A BRC has takes the initiative to study new areas of real estate law and keep abreast of happenings in the industry." There is a third type of representation which basically combines both of the above mentioned relationships. A 'Disclosed Dual Agent" is a real estate agent who is representing both the buyer and the seller with the knowledge and written consent of both parties. While these agents still give their best effort to marketing the seller's home, dual agents cannot give either buyer or seller undivided loyalty or disclose any confidential information. Dual agency occurs, for example, when a buyer working with a buyer's agent wants to purchase an in-company listing; that is, a home listed by the company of the buyer's agent. All agents in the company, are automatically agents of the seller by virtue of their association with the listing agent's company. Whether the buyer and seller are working with different associates from the same company, or the same agent working as both the listing and buyer's agent, a dual agency relationship develops with both, the buyer and the seller. The broker and associates may not share without permission what price a seller would accept nor how much a buyer is willing to pay. When a dual agency relationship occurs, the buyer and seller must agree to modify the agency relationship. Though the relationships have changed, the basic goals haven't; the seller wants to sell, the buyer wants to buy, and the agents want to help close the transaction. Maria reminds us, "remember, the goal of all real estate agents is the same - to help bring about the sale or purchase of a home. Expect to be treated with honesty regardless of agency relationship, and don't accept less. Together buyer, seller and agents get the job done. " |
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 This article graciously contributed by Maria F. Vicknair LATER & BLUM INC/REALTORS |
