Once you have made the decision to purchase or sell a home, the next step is to find a real estate agent who will best represent you and your housing needs.
There are three types of real estate agencies: the Buyer’s Agent, the Seller’s Agent, and the Dual Agent.
These are the three typical Agent/Client relationships that may occur. The terms of these relationships may vary from state to state, so please verify the terms of these Agency Agreements in your local area before signing any agreements.
The Buyer’s Agent
Many prospective home buyers do not feel it is necessary to contract the services of a real estate agent. They feel that the listing agent will represent them fairly during the buying process. However, what many buyers do not know is that the listing agent, or Seller’s Agency, works solely on behalf of, and in the best interest of the home seller. Therefore, it is essential that the buyer seek out and find a Buyer’s Agent that will best meet their needs.
A Buyer’s Agency works solely on behalf of the buyer. The buyer’s agent will assist their client in the negotiation of the terms of a contract. In addition, they will gather information on zoning issues, past tax data, schools and community services, and any other information deemed necessary by the buyer before making the decision to extend an offer on a home.
Many prospective home buyers have the misconception that once they begin working with an agent, he/she represents the buyer. However, this is not always the case. Unless there is a signed Buyer’s Agency Agreement, the agent that is working with the buyer still represents the seller’s interests in the transaction. Without the agreement, there is certain information that the agent cannot disclose to the prospective buyer:
- The reason that the owner is selling the property.
- Any concessions that the seller is willing to negotiate.
- Any conversations between the seller and the agent.
- Any disclosed information that would harm the seller and/or give the buyer an advantage in the contract negotiations.
Normally, there are no extra costs associated with signing a Buyer’s Agency Agreement. Any commissions paid to agents in a sales transaction are usually paid at closing by the seller.
The Seller’s Agent
This agent solely represents the seller. If there is an agent involved in a sales transaction, by default, that agent will represent the home seller unless there is a signed Buyer’s Agency Agreement with the buyer.
When looking for an agent to work with, it is best to interview a minimum of 2 to 3 real estate agents before making your final decision. Ask friends and relatives for names that they would recommend.
Below is a list of questions that may help you in deciding on which agent will best meet your needs:
- How long have you been in the Real Estate Business?
- How familiar are you with the area? How long have you lived in the area? How long have you sold houses in this area?
- How many clients are you currently working with?
- Do you work with more sellers or buyers?
- How many homes did you sell last year?
- What is your typical commission?
- How do you plan on marketing or promoting my home?
- Can you provide me with names and phone numbers of some of your most recent clients who would be willing to give me a reference (if this agent has not already been referred to you by a friend or family member)?
When selecting a real estate agent to represent your interests, it is important to find an agent that you trust and feel comfortable with. Remember, this is probably the biggest sales transaction you will have in your life, so it is important to work with someone that you are sure will get you the best offer!
The Dual Agent
A Dual Agency Agreement occurs when two agents who work for the same Broker each represent a buyer or a seller in the sales transaction. This agreement must be disclosed to both the seller and the buyer, and any privileged information cannot be disclosed to the interested party without the permission of the other party.