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Working
With Real Estate Agents
SELLERS
BUYERS
When buying
or selling real estate, you may find it helpful to have
a real estate agent assist you. Real estate agents can
provide many useful services and work with you in
different ways. In some real estate transactions, the
agents work for the seller. In others, the seller and
buyer may each have agents. And sometimes the same
agents work for both the buyer and the seller. It is
important for you to know whether an agent is working
for you as your agent or simply working with you while
acting as an agent of the other party.
This page
addresses the various types of working relationships
that may be available to you. It should help you decide
which relationship you want to have with a real estate
agent. It will also give you useful information about
the various services real estate agents can provide
buyers and sellers, and it will help explain how real
estate agents are paid.
SELLERS
Seller's Agent
If
you are selling real estate, you may want to "list" your
property for sale with a real estate firm. If so, you
will sign a "listing agreement" authorizing the firm and
its agents to represent you in your dealings with buyers
as your seller's agent. You may also be asked to allow
agents from other firms to help find a buyer for your
property.
Be sure to read and understand the
listing agreement before you sign it.
Duties to Seller
The
listing firm and its agents must promote your best
interests be loyal to you follow your lawful
instructions provide you with all material facts that
could influence your decisions use reasonable skill,
care and diligence, and account for all monies they
handle for you. Once you have signed the listing
agreement, the firm and its agents may not give any
confidential information about you to prospective buyers
or their agents without your permission. But until you
sign the listing agreement, you should avoid telling the
listing agent anything you would not want a buyer to
know.
Services and
Compensation
To
help you sell your property, the listing firm and its
agents will offer to perform a number of services for
you. These may include:
- helping
you price your property
- advertising
and marketing your property
- giving
you all required property disclosure forms for you to
complete
- negotiating
for you the best possible price and terms
- reviewing
all written offers with you and otherwise promoting
your interests.
For
representing you and helping you sell your property, you
will pay the listing firm a sales commission or fee. The
listing agreement must state the amount or method for
determining the commission or fee and whether you will
allow the firm to share its commission with agents
representing the buyer.
Dual Agent
You
may even permit the listing firm and its agents to
represent you and a buyer at the same time. This "dual
agency relationship" is most likely to happen if an
agent with your listing firm is working as a buyer's
agent with someone who wants to purchase your property.
If this occurs and you have not already agreed to a dual
agency relationship in your listing agreement, your
listing agent will ask you to sign a separate agreement
or document permitting the agent to act as agent for
both you and the buyer.
It may be difficult for a
dual agent to advance the interests of both the buyer
and seller. Nevertheless, a dual agent must treat buyers
and sellers fairly and equally. Although the dual agent
owes them the same duties, buyers and sellers can
prohibit dual agents from divulging certain confidential
information about them to the other party.
Some
firms also offer a form of dual agency called
"designated agency" where one agent in the firm
represents the seller and another agent represents the
buyer. This option (when available) may allow each
"designated agent" to more fully represent each
party.
If you choose the "dual agency" option,
remember that since a dual agent's loyalty is divided
between parties with competing interests, it is
especially important that you have a clear understanding
of what your relationship is with the dual agent and
what the agent will be doing for you in the
transaction.
BUYERS
When
buying real estate, you may have several choices as to
how you want a real estate firm and its agents to work
with you. For example, you may want them to represent
only you (as a buyer's agent). You may be willing for
them to represent both you and the seller at the same
time (as a dual agent). Or you may agree to let them
represent only the seller (seller's agent or subagent).
Some agents will offer you a choice of these services.
Others may not.
Buyer's Agent
Duties to Buyer
If
the real estate firm and its agents represent you, they
must promote your best interests be loyal to you follow
your lawful instructions provide you with all material
facts that could influence your decisions use reasonable
skill, care and diligence, and account for all monies
they handle for you. Once you have agreed (either orally
or in writing) for the firm and its agents to be your
buyer's agent, they may not give any confidential
information about you to sellers or their agents without
your permission. But until you make this agreement with
your buyer's agent, you should avoid telling the agent
anything you would not want a seller to know.
Unwritten Agreements
To
make sure that you and the real estate firm have a clear
understanding of what your relationship will be and what
the firm will do for you, you may want to have a written
agreement. However, some firms may be willing to
represent and assist you for a time as a buyer's agent
without a written agreement. But if you decide to make
an offer to purchase a particular property, the agent
must obtain a written agency agreement. If you do not
sign it, the agent can no longer represent and assist
you and is no longer required to keep information about
you confidential. Furthermore, if you later purchase the
property through an agent with another firm, the agent
who first showed you the property may seek compensation
from the other firm.
Be sure to read and
understand any agency agreement before you sign
it.
Services and
Compensation
Whether
you have a written or unwritten agreement, a buyer's
agent will perform a number of services for you. These
may include helping you
- Find a
suitable property
- Arrange
financing
- Learn
more about the property and other-wise promote your
best interests.
If
you have a written agency agreement, the agent can also
help you prepare and submit a written offer to the
seller.
A buyer's agent can be compensated in
different ways. For example, you can pay the agent out
of your own pocket. Or the agent may seek compensation
from the seller or listing agent first, but require you
to pay if the listing agent refuses. Whatever the case,
be sure your compensation arrangement with your buyer's
agent is spelled out in a buyer agency agreement before
you make an offer to purchase property and that you
carefully read and understand the compensation
provision.
Dual Agent
You
may permit an agent or firm to represent you and the
seller at the same time. This "dual agency relationship"
is most likely to happen if you become interested in a
property listed with your buyer's agent or the agent's
firm. If this occurs and you have not already agreed to
a dual agency relationship in your (written or oral)
buyer agency agreement, your buyer's agent will ask you
to sign a separate agreement or document permitting him
or her to act as agent for both you and the seller. It
may be difficult for a dual agent to advance the
interests of both the buyer and seller. Nevertheless, a
dual agent must treat buyers and sellers fairly and
equally. Although the dual agent owes them the same
duties, buyers and sellers can prohibit dual agents from
divulging certain confidential information about them to
the other party.
Some firms also offer a form of
dual agency called "designated agency" where one agent
in the firm represents the seller and another agent
represents the buyer. This option (when available) may
allow each "designated agent" to more fully represent
each party.
If you choose the "dual agency"
option, remember that since a dual agent's loyalty is
divided between parties with competing interests, it is
especially important that you have a clear understanding
of what your relationship is with the dual agent and
what the agent will be doing for you in the transaction.
This can best be accomplished by putting the agreement
in writing at the earliest possible time.
Seller's Agent Working With a
Buyer
If
the real estate agent or firm that you contact does not
offer buyer agency or you do not want them to act as
your buyer agent, you can still work with the firm and
its agents. However, they will be acting as the seller's
agent (or "subagent"). The agent can still help you find
and purchase property and provide many of the same
services as a buyer's agent. The agent must be fair with
you and provide you with any "material facts" (such as a
leaky roof) about properties.
But remember, the
agent represents the seller not you and therefore
must try to obtain for the seller the best possible
price and terms for the seller's property. Furthermore,
a seller's agent is required to give the seller any
information about you (even personal, financial or
confidential information) that would help the seller in
the sale of his or her property. Agents must tell you in
writing if they are sellers' agents before you say
anything that can help the seller. But until you are
sure that an agent is not a seller's agent, you should
avoid saying anything you do not want a seller to
know.
Sellers' agents are compensated by the
sellers.
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