Who Represents Whom?

Learn this up front . . . who represents whom?

In a very high percentage of all home sales, a real estate agent is involved.  To buyers and sellers alike, it is important to know whom the agent is representing.

Where agents are employed by, and thus represent, the interests of property owners, the sellers pay the agent a fee in exchange for the agent's expertise in locating suitable buyers for their home.  The agent has a fiduciary relationship with the sellers, and an obligation to pursue a course of action in their best interests.

When the agent represents the sellers, what relationship exists between that agent and any buyers who are shown the home?  The relationship is that of a salesperson/customer.  The agent is obligated to treat the customer honestly and fairly, but is clearly looking out for the best interests of the property owners.

Can buyers hire an agent to represent them?  They certainly can.  Just as homeowners sign an exclusive listing agreement with their agent, buyers can hire the services of an agent by signing an exclusive buyer agency agreement.  The buyer has the right to expect the agent to negotiate a purchase in their best interests, paying special attention to price, terms, inspections, and closing details that benefit the buyer.

Homebuyers who employ a buyer's agent also have the obligation to compensate the agent for services rendered.  There are a variety of compensation plans that should be discussed directly with the agent.

Dual agency is a third alternative.  In dual agency, buyers and sellers are represented by the same agent, a situation that carries with it an inherent conflict of interest.  When buying or selling a home, ask the agent who is being represented, then proceed with an informed decision.

11:38 AM - Apr. 9, 2008 - comments {0} - post comment
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