FOR THE SELLER
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As a seller, who represents me?
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The real estate firm with whom you list your property for sale and
its agents represent you. In addition, you may authorize the listing firm to allow agents with other
firms (subagents) to show your property and represent you.
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As a seller, what should my agent do for me?
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Among other things, your agent should provide you with an analysis of
your property and market it. The listing agency may also represent the seller and the buyer in the role of a
dual agent. Your agent will explain dual agency to you and give you written information regarding agency.
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How is a seller's agent compensated?
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The seller typically pays the listing firm a brokerage fee or sales
commission as agreed upon in the listing contract. The commission is usually a percentage of the selling price.
The firm then pays a portion of its commission to the individual agents involved in the sale (including
seller's subagents associated with other firms). In addition, the listing agent may sometimes (with the
seller's permission) pay part of the commission to the buyer's agent.
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As a seller, how will I know if the agent working with the buyer
is his agent or mine?
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An agent working for a buyer must tell you or your agent that he is
a buyer's agent at his initial contact with you. And if his principal (the buyer) makes an offer to purchase
your property, he must state again in the offer or in some other written statement that he represents the
buyer.
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FOR THE BUYER
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As a buyer, who represents me?
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An agent may agree in writing to represent you as your "buyer's
agent." If you are instead working with an agent of the seller, then no one represents you in the
transaction. However, the seller's agent must still be fair and honest to you and report to you any material
facts about the property itself (leaky basement, broken furnace, etc.), or that relate directly to the property
(pending zoning changes or the planned widening of an adjacent street), or that relate directly to the seller's
ability to complete the transaction (a pending foreclosure, etc.).
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As a buyer, what should my agent do for me?
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Your agent should assist you in determining what price you can afford
and help you locate property that suits your needs. The buyer's agent should also provide you with all relevant
information about the property, help arrange for inspections and financing, assist you in bargaining for the
lowest price and best terms possible, and promote your best interests.
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As a buyer, if I contact an agent by phone, will he or she
automatically represent me?
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No. Consequently, you should avoid disclosing any personal, financial
or other confidential information during an initial telephone call to a real estate agent. Real estate brokers
and salespeople, on the other hand, can provide you with information about themselves or available properties
even before any agency (or non-agency) relationship is established. Whether talking by telephone or in person,
you and the agent should agree at your first substantial contact whether the agent will represent
you. If the agent will be representing you, he will ask you to sign a buyer agency agreement. If not, he
will ask you to sign a "Disclosure to Buyer from Seller's Agent or Subagent" form advising
you that he represents the seller — not you.
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If I go to an "open house," what kind of agency
relationship will be created with the agent on duty there?
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Generally none. Open houses are typically conducted by agents of
the seller. Therefore, before you begin any serious discussions with the person(s) on duty about purchasing
the house, he should ask you to sign a "Disclosure to Buyer from Seller's Agent or Subagent"
form advising you that he represents the seller.
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As a buyer, if I choose not to have an agent represent me,
what can the seller's agent do for me?
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The seller's agent can provide you with information about properties
and the areas where they're located. He can also assist you in obtaining financing and inspections, provide
information about dosing procedures, and other things. However, you should always remember that he represents
the seller — not you! Therefore, you should never disclose any private or financial information to the
agent that you would not want the seller to know.
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How are buyer's agents compensated?
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A buyer's agent can be compensated in different ways, depending upon
the method agreed upon in the buyer agency contract. As a buyer, you can pay the agent out of your own pocket,
or the agent could agree to seek a portion of the listing agent's commission. Often, the buyer's agent will
agree to seek compensation from the listing agent and seller first, but require payment from you if they
refuse. The buyer's agent may also require a non-refundable retainer fee. As a buyer, you should read the
buyer agency agreement carefully to determine what financial obligation, if any, you have to the agent.
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For Buyers and Sellers:
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Can an agent represent a buyer and seller at the same time?
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Yes. An agent or firm may become a "dual agent" and represent
both the buyer and the seller in the same transaction. However, the buyer and the seller must consent to this
arrangement in either a "Dual Agency Addendum" at the time they enter into the listing or buyer
agency agreement, or in a separate dual agency agreement.
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When will dual agency occur?
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Dual agency most often occurs when a buyer who is being represented by
a real estate firm becomes interested in a property listed with the firm.
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Questions
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As a buyer, if I work with a seller's agent in finding property
and then decide to buy something listed by his firm, will the firm and its agents be dual agents?
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No. Since the agent and his firm were not representing you before,
they won't begin representing you simply because you choose to buy one of their listings. Rather, the firm
and its agents will continue to represent only the seller.
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How can a dual agent be loyal to both buyer and seller?
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In practical terms, it may be difficult for one agent or firm to
advance the interests of both the buyer and the seller in the same transaction. After all, the seller wants
the highest price and best terms possible, while the buyer wants the lowest price and best terms possible.
Nevertheless, the dual agent must be fair to both sides and treat each as if he were his only client. The
dual agent must disclose to each party any information he learns from the other, with one exception: A
dual agent will not reveal to a buyer the lowest price the seller will accept, or to a seller, the maximum
price a buyer is willing to pay. Since the agent's loyalty is divided between parties with conflicting
interests, it is especially important that any dual agency agreement be in writing and specifically describe
the rights and duties of the parties.
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For Your Information
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How long does an agency relationship last?
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An agency relationship lasts for the time period specified in the
agency contract or until the client's purpose is accomplished (i.e., the sale or purchase of a property),
whichever occurs first.
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Once an agency relationship ends, will my former agent still keep
my confidences?
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Not necessarily. An agent should never disclose personal information
without good reason. However, should your former agent later represent another party in a transaction
with you, he will have a duty to disclose to his new client any information that could make a difference to
that client or influence his decision to buy or sell. For example, if an agent who formerly represented you
is now working with a buyer who is interested in purchasing your property, the agent must disclose to the buyer
material facts he knows about you that would help the buyer in the transaction.
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Questions
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Can I use more than one agent at the same time?
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Maybe. It will depend on the type of agreement you sign with your
listing agent or buyer's agent. If you sign an "exclusive" listing or buyer agency contract, you
should avoid contracting with another agent. If you want to contract with more than one agent, you should
contact an attorney first for advice.
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Can an agent stop representing me in the middle of a transaction
and start representing the other side?
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Not without your permission.
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Are the laws and rules governing agency agreements and disclosure
the same for residential and commercial property? |
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Yes. They apply equally to agents involved in residential and
commercial real estate transactions.
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