Before you decide to sell or buy or rent a home you need to consider the following information:
Agents Who Represent the Seller
A seller’s agent works for the real estate company that lists and markets the property for the sellers, or landlords, and exclusively represents the sellers or landlords. That means that he or she may assist the buyer or tenant in purchasing or renting the property, but his or her duty of loyalty is only to the sellers or landlords. The seller pays the seller’s agent’s fees as specified in a written listing agreement.
A cooperating agent works for a real estate company different from the company for which the seller’s agent works. The cooperating agent can assist a buyer or tenant in purchasing or renting a property, but his or her duty of loyalty is only to the sellers or landlords. The cooperating agent’s fee is paid by the sellers or landlords through the seller’s agent’s company.
Agents Who Represent the Buyer
Presumed Buyer’s Agent (no written agreement)
When a person goes to a real estate agent for assistance in finding a home to buy or rent, the agent is presumed to be representing the buyer and can show the buyer properties that are not listed by the agent’s real estate company. A presumed buyer’s agent may not make or prepare an offer or negotiate a sale for the buyer. The buyer does not have an obligation to pay anything to the presumed agent.
If for any reason the buyer does not want the agent to represent him or her as a presumed agent, either initially or at any time, the buyer can decline or terminate a presumed agency relationship simply by saying so.
Buyer’s Agent (by written agreement)
A buyer or tenant may enter into a written contract with a real estate agent which provides that the agent will represent the buyer or tenant in locating a property to buy or rent. The agent is then known as the buyer’s agent. That agent assists the buyer in evaluating properties and preparing offers, and negotiates in the best interests of the buyer or tenant. The agent’s fee is paid according to the written agreement between the agent and the buyer or tenant. If you as a buyer or tenant wish to have an agent represent you exclusively, you must enter into a written buyer agency agreement.
The possibility of dual agency arises when the buyer’s agent the seller’s agent both work for the same real estate company, and the buyer is interested in property listed by that company. The real estate company, or broker, is called the “dual agent”. Dual agents do not act exclusively in the interests of either the seller or buyer, or landlord or tenanat, and therefore cannot give undivided loyalty to either party. There may be a conflict of interest because the interests of the seller and buyer may be different or adverse.
If both seller and buyer, or landlord and tenant, agree to dual agency by signing a Consent For Dual Agency form, then the real estate company (the “dual agent”) will assign one agent to represent the seller or landlord (the seller’s “intra-company agent”) and another agent to represent the buyer or tenant (the buyer’s “intra-company agent”). Intra-company agents may provide the same services to their clients as exclusive seller’s or buyer’s agents, including advising their clients as to price and negotiation strategy, provided the clients have both consented to be represent by dual agency.
If either party does not agree to dual agency, the real estate company may withdraw the agency agreement for that particular property with either the buyer or seller, or both. If the seller’s agreement is terminated, the seller must then either represent him or herself or arrange to be represented by an agent from another real estate company. If the buyer’s agreement is terminated, the buyer or tenant may choose to enter into a written buyer agency agreement with an agent from a different company. Alternatively, the buyer or tenant may choose not to be represented by an agent of his or her own but simply to receive assistance from the seller’s agent, from another agent in that company, or from a cooperating agent from another company.
No matter what type of agent you choose to work with, you have the following rights and responsibilities in selling or buying or renting property:
- Real estate agents are obligated by law to treat all parties to a real estate transaction honestly and fairly. They must exercise reasonable care and diligence and maintain the confidentiality of clients. They must not discriminate in the offering of properties; they must promptly present each written offer or counter offer to the other party; and they must answer questions truthfully.
- Real estate agents must disclose all material facts that they know or should know relating to a property. An agent’s duty to maintain confidentiality does not apply to the disclosure of material facts about a property.
- All agreements with real estate agents should be in writing and should explain the duties and obligations of the agent. The agreement should explain how the agent will be paid and any fee-sharing agreements with other agents.
- You have the responsibility to protect your own interest. You should carefully read all agreements to make sure they accurately reflect your understanding. A real estate agent is qualified to advise you on real estate matters only. If you need legal or tax advice, it is your responsibility to consult a licenses attorney or accountant.