Once upon a time, real estate transactions were handled exclusively by a seller’s agent (also known as the listing agent). Recently, the real estate industry has changed and a “new” type of agent has emerged – the Buyer’s Agent. A Buyer’s Agent is an agent that works exclusively for and protects the best interest of their client – the homebuyer.
Many homebuyers have a misconception that working with the listing agent will “get them a deal.” It is important to understand that a listing agent represents a seller in a real estate transaction. Legally, the agent has a fiduciary duty to protect the seller’s interests – and only the seller’s interests. So, the only “deal” is that a buyer gets when working with a list agent is that they have no one committed to working for them! It is becoming more popular for buyers to select an agent to specifically represent their needs in the transaction.
All real estate agents can arrange property showings, assist with financing and manage the paperwork involved with the transaction. However, if a buyer forgoes using a Buyer’s Agent and works directly with a listing agent, the list agent:
- cannot legally negotiate a purchase price in a buyer’s favor;
- cannot disclose the history of the property or the reasons for selling; and
- are not required to keep the information that the buyer’s share with them confidential.
However, Buyer’s Agents can do all of the following:
- work to find properties that match the buyer’s needs;
- e-mail daily listings of properties and arrange property showings;
- attend open houses with clients;
- negotiate the home price based on the buyer’s best interests;
- disclose all of the information that they find out about the property; and
- keep the buyer’s information confidential.
A Buyer’s Agency Agreement is an exclusive relationship between a buyer and agent for a real estate transaction. This agreement is a commitment from BOTH parties – an agent commits to represent a buyer AND the buyer commits to the agent and to not use another agent in purchasing a property.