Working with Real Estate Agents
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 article 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 so long as they
represent you. 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
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 so long as they represent
you. 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
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
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.
The
acknowledgement card for this document is
available for
you to print and sign.
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