"Realizing your agent isn't on your side is a little
like learning there is no Santa Claus." OLD HOUSE JOURNAL September 1996 Between the huge sums of money and mountain of paperwork involved, the experience of buying a home can make you an emotional wreck!! The last thing you need is to find out too late in the game that the real estate agent you thought was so nice and helpful is really working for the Seller and can't help you determine how much to offer or how to strategize to get the best price and terms on your dream home. It is not unusual for home buyers to be confused about who works for whom. The Federal Trade Commission studied the problem and released findings in 1983 that confirmed both buyers and sellers were confused about the role of real estate agents. Agency disclosure regulations have helped consumers understand the different roles of real estate agents and realize that they have a choice -- they can select:
- Exclusive Buyer Agency
- Single Agency
- Non-exclusive Buyer Agency
- Seller Agency
- Disclosed Dual Agency
Of these choices, exclusive buyer agency is the absolute best for buyers who want to avoid the potential for conflict of interest when real estate agents represent sellers also represent buyers who may want one of their listings. Exclusive buyer agents NEVER TAKE LISTINGS and represent buyers 100% of the time. Single agents are the next best choice because, although they take listings, they never represent the seller and buyer in the same transaction. They generally refer out buyers who want one of their listings. Non-exclusive buyer agents can offer buyer agency services but must "go neutral" if one of their own listings or their company's listings happen to be the house you want to buy. When this happens, you end up in a disclosed dual agency situation which may not sound bad when you sign up for buyer agency services but when you realize that you get reduced services for the same commission, it looks a lot less attractive. If the company is one of the biggest, you have a much greater chance of wanting one of their many listings. Think about the implications before you sign up-- after you find your dream home, it's too late to "unring the bell" and ask the agent to forget all that confidential information you shared about your motivation and financial background. The seller's agent works as a sub-agent to the listing agent or is the listing agent and therefore works to get the highest price for the seller. It goes without saying that "you're on your own" when it comes time to figure out the value of the property, what to offer, and how to negotiate. Take the time to understand your options before you find the house you want to buy. It may seem odd to look for a real estate agent before you look for a house but the smart consumer knows all real estate agents are not the same -- today you can be represented when buying!! |
