Most homebuyers believe that the agent with whom they are working — sometimes on a daily basis – represents them and their interests. However, this is not the case. Read on!
The agent, unless specifically disclosed otherwise, represents the seller in any transaction for the sale of a home. It is that agent’s fiduciary duty (where their loyalty lies) to protect the seller’s position at all times.
Consider these two examples:
Example 1: You see a house advertised in the newspaper, a home magazine, or the internet. You contact the listing agent (this is who will be advertising the home) and make an appointment to see the house. The agent is friendly, informative, and tells you what you believe to be everything about the house. The agent represents the seller, not you.
Example 2: You are working with an agent, who shows you 25 different homes over 3 weekends. The agent buys you lunch twice, knows all four of your children by name as well as all of your personal likes and dislikes. You feel comfortable with the agent, revealing important personal information. But again, this agent represents, and owes loyalty to, each and every one of those 25 sellers – not you! In fact, any information you reveal to the agent must be relayed to the sellers.
In addition, it is important to understand that if the agent represents the seller, they cannot reveal certain things to you, as the buyer. Some of those items include:
- The reason for selling (unless the seller specifically authorizes it)
- Any concessions, in price or otherwise, that the seller may be willing to give up.
- Any conversations that the seller and the agent may have had.
- Any information that could be detrimental to the seller, or give you, the buyer, an advantage. This would include a (Comparable Market Analysis) that could put the seller at a disadvantage.
Buyer’s Agency, however, may be an option to protect your interests. Simply put, it allows the buyer’s agent to be your representative and to put your interests above all others.
If a Buyer Agency agreement is struck between you and the agent, it is you, rather than the seller, who has the representation from the agent with whom you are working. If you are represented by a Buyer’s Agent, some of the potential benefits include:
- The agent can create a CMA (Comparable Market Analysis), revealing at what price similar properties in the area have been listed for and sold for.
- The agent can reveal to you any information about the seller that the agent has been able to ascertain. This may include reasons for selling, potential concessions, or other information that may be to your advantage.
- Information about property value trends that may influence your decision about a certain area can be relayed to you.
Is it necessary to have a Buyer’s Agent? No. But the important thing is to understand your options, so that you don’t unintentionally accept less representation than you want, need, and deserve.