It's important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. Below is an explanation of what type of agency relationship you may establish with him or her and with the brokerage company.
1. Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
2. Subagent. The subagent works with the buyer as a customer but owes the same fiduciary duties to the listing broker and the seller. Sub-agency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer-customer as a buyer's representative (an exclusive buyer's representation agreement has not been signed) or operating in a non-agency relationship, shows property to a buyer. Although a subagent cannot assist the buyer-customer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyer-customers.
3. Buyer's representative (also known as a buyer's agent). A real estate licensee who is hired by prospective buyers (an exclusive buyer's representation agreement has been signed) to represent them in a real estate transaction. The buyer's rep works in the client's best interest throughout the transaction and owes fiduciary duties to the buyer-client. The buyer-client can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or by a commission split with the listing broker.
4. Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients - the duty of confidentiality to one client is in conflict with the duty of full disclosure to the other client. Dual agents will therefore owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them is legal in most states.
Are you a Buyer-Customer or a Buyer-Client?
It is important that you know the difference because there are different levels of services that licensees perform when working with buyer-customer's vs. buyer-client's. Do not disclose any information that you do not want readily known until after you have signed an agreement with your agent. Remember, when an agent is working with a buyer-customer the agent represents the seller - not you.
What is a Buyer's Agent?
A BUYER'S AGENT is a new breed of real estate sales associate who strictly represents YOU, the BUYER. This legal distinction is important to understand because agents for the SELLER conduct the majority of today's real estate transactions. A seller's agent is contractually bound to obtain the price and terms most favorable to the selling party.
What does a Buyer's Agent do?
A Buyer's Agent stands ready to assist you in every possible way, from start to finish. The moment you contact us, we begin to work on a customized itinerary focused on personally touring you through each community, model center or home that meets your requirements. As your Buyer's Agent, we will contact you by phone or email and develop a more in-depth understanding of your needs. You can count on our local knowledge about communities, local schools, banks and more. We look forward to assisting you with your home selection, financing, and even construction details in the event you decide to build. We know how to do all the legwork to make your move go as smoothly as possible, so you can concentrate on more important things.
How much does a Buyer's Agent cost?
And now for the best news: the Buyer's Agent services are FREE to you, the prospective buyer! There are no hidden charges or obligations. How is this accomplished? All fees are paid by the SELLERS in the form of previously negotiated agreements. My goal is to satisfy you, the buyer. I offer professional, personalized real estate services, objective advice, and I do it all at no cost to you.
Ten Tips for First-Time Homebuyers:
1. Be picky, but don't be unrealistic. There is no perfect home.
2. Do your homework before you start looking. Decide specifically what features you want in a home and which are most important to you.
3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and your closing costs
4. Don't wait to get a loan. Talk to a lender and get pre-qualified for a mortgage before you start looking.
5. Don't ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion.
6. Decide when you could move. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area?
7. Think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you'll buy as well as type of mortgage terms that suit you best.
8. Don't let yourself be house poor. If you max yourself out to buy the biggest home you can afford, you'll have no money left for maintenance or decoration or to save money for other financial goals.
9. Don't be na´ve. Insist on a home inspection and if possible get a warranty from the seller to cover defects within one year.
10. Get professional help. Hire a REALTOR« as a buyer's representative. Unlike a listing agent, whose first duty is to the seller, a buyer's representative is working only for you. And often, buyer's reps are paid out of the seller's commission payment.
Courtesy of REALTOR« Magazine Online
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