Are you about to begin your search for a new home? Do you know you should have a realtor representing you & looking out for your best interests?
When working with a REALTOR, it is important to understand who the REALTOR works for.
In real estate, there are 3 different possible forms of agency relationship:
1. Vendor's Agent
When a real estate company is a "vendor's agent" or "sellers agent", it must do what is best for the seller of a property.
A seller's agent must tell the seller anything known about a purchaser. For instance, if a seller's agent knows a purchaser is willing to offer more for a property, that information must be shared with the seller. Confidences a seller shares with a seller's agent must be kept confidential.
A purchaser can expect fair service and disclosure of pertinent information about a property. Nothing will be misrepresented about a property. All questions will be answered honestly.
Do that make you want to just start calling agents that have the property your interested in? Think again!
2. Purchaser's Agent
A real estate company acting as a "purchaser's agent" or "buyer's agent must do what is best for the buyer.
A written contract establishes buyer agency. It also explains services the REALTOR will provide, spells out who will pay and specifies what obligations a buyer may have. Typically, buyers will be abliged to work exclusively with that REALTOR for a specified period of time.
A REALTOR working for a buyer will keep information about the buyer completely confidential from the seller.
3. Dual Agent - Multiple Representation
Occasionally a real estate company will be the agent of both the buyer and seller. Under this "dual agency" and/or Multiple Representation arrangement, the REALTOR must do what is best for both the seller and buyer.
An agent that is entering into Multiple Representation must fully disclose information to both the buyer and seller. No information will be confidential.
A REALTOR can be a dual agent only if both the purchaser and vendor agree in writing, most often at the time of an offer.
99% of the time, the REALTOR will be paid from the proceeds of the sale of the home. The listing agreement states the REALTOR's fee.
When more than one REALTOR is involved
75% of the time a buyer will work with one REALTOR and a seller will work with another. It may appear that the REALTOR working with the buyer is working for that purchaser, in an agency relationship but that is not necessarily the case.
The REALTOR working with a buyer may be a "sub-agent" of the seller. In this case, the REALTOR is actually a seller's agent. While a vendor's agent can provide many valuable services to a buyer, he or she must do what is best for the seller.
If a written contract exists with a buyer, a REALTOR can be a buyersr's agent. Buyers and sellers will always be told -in writing- who a REALTOR is working for.
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