Many buyers do not fully understand the home-buying process and the role of a real estate agent. Here are some of the most often asked questions agents receive from buyers.
What is a “Buyer Agency Agreement”?
A “buyer agency agreement” is a contract between a buyer and a real estate agent. Contracts can vary in length, and can include or exclude certain geographical areas. The buyer agency agreement lays out the commitments of the buyer to the agent, and of the agent to the buyer.
Is it expensive to use a buyer’s agent?
The compensation that a buyer’s agent (also called the “selling agent”) receives typically comes from the seller’s proceeds and is a percentage of the total commission charged by the listing company. That information is available to me through the Multiple Listing Service (MLS). In such a case, there is no cost for a buyer to be represented by an agent.
If a buyer is interested in purchasing a property not listed in an MLS, it is possible that the
seller will not compensate the buyer’s agent. In this case, a buyer agency agreement would detail the buyer’s obligation to compensate their agent. Typically, even with unlisted
properties, the seller compensates the buyer’s agent.
What is a “dual agent”, and should I work with one?
“Dual agency” refers to the practice of a single agent representing both the buyer and the
seller during the real estate transaction. When an agent acts in a dual capacity, they owe the same fiduciary responsibility to both parties. Most states have a required brochure or pamphlet which details the responsibilities of buyer’s agents, seller’s agents, and dual agents.
Buyers considering the use of a dual agent should pay particular attention to the difference in responsibilities when an agent acts as a representative of both the buyer and the seller.
When you are working with an agent who is acting as a dual agent, you have lost your strong “advocate” in the buying process. In addition, buyers usually meet dual agents at open houses – meaning that the agent has already developed a strong working (and contractual) relationship with the seller. In such a case, it’s human nature that the agent is going to feel a stronger responsibility to negotiate on the seller’s behalf. Since the seller has already agreed to compensate an agent as part of the listing agreement, it only makes sense for you to find an agent who is solely committed to being your advocate. The practice of dual agency, when not performed correctly, is one of the leading causes of real estate litigation.
Can I go to open houses without my agent?
Yes. However, when meeting the agent hosting the open house it’s best if you immediately identify yourself as working with another agent. If you don’t, your agent might not be able to help you write an offer on that property in the future.
Can I work with more than one agent?
Sometimes buyers think that having more than one agent “working for them” means they’ll have more sets of eyes looking out for the perfect home. The reality is that agents all have access to the same database of homes on the market—the MLS. Working with just one agent also allows that agent to spend enough time with you to really get to know you and your wants & needs. They’ll be able to ask questions as they show you homes, helping you refine your parameters as you go. Having one agent also saves you time, as once your agent knows you well, they will not show you homes they know will not work for you. Finally, it’s a difficult situation for an agent to work with a buyer who is working with multiple real estate agents; without a commitment from you to work with just one agent, it’s not likely that the agent will do their best work for you.
The exception to this situation is a buyer who is looking in a large geographic area. If you are looking for property outside the market area your agent specializes in, ask them for a referral to an agent in another area(s). That way, both agents are in communication during the home search, allowing them to partner in finding you the right property.