06 Apr A Little Lesson in Agency
Last week we had our First Time Homebuyer Seminar at The Wine Mill. There were many important points that we discussed, but one of the most important was about agency – describing the role of the sellers/listing agent and the buyers agent. This can be confusing for anyone looking to purchase a home, not just first time homebuyers. Below is a great article that helps to describe agency, and why it is important for both buyers and sellers to the roles, and goals of their agent. Here is a quick rundown of the different roles an agent can play in any one transaction.
“The Listing Agent – The listing agent or seller’s agent works for the seller and represents their interests in the sale. The seller hires their agent, typically in writing, to market and sell their home. The listing agent’s responsibility is to get the seller the highest amount of money in the shortest period. Their fiduciary goals and loyalty should be with the seller at all times.
The Buyer’s Agent – Purchasing a home can be emotionally draining, not to mention financially stressful. Many consumers seek independent counsel from a buyer’s agent. A buyer’s agent works with them for as long as it takes to make a purchase. They teach the buyers the market, show them lots of homes, and eventually advise when it comes time to make an offer and negotiate with the seller. An invaluable resource, a buyer’s agent stands by the buyer’s side for the duration of their home search.
The Dual Agent – Sometimes a buyer forgoes independent representation and chooses to work directly with the listing agent. This situation isn’t allowed in some states because of the conflict of interest. Where it is allowed, a dual agent represents both sides of the transaction at the same time. In the case of a dual agent, it’s impossible for the agent to be completely loyal to either party. Both parties must agree to dual agency in writing, in advance.
Who pays for the agent? – The seller pays the real estate agent’s commission when the deal closes. The two agents then split the commission. In the case of the dual agent, the agent takes home the entire commission.
Should you use the listing agent as a dual agent? – Unless you are an experienced real estate investor, it’s best to stick with a buyer’s agent. There’s no cost, and a good buyer’s agent will provide an invaluable amount of advice and support in what can end up being a very stressful period. The home search can involve many twists and turns, so having a loyal adviser along the way will help you make an informed decision on what is likely the largest purchase of your life.”
Source: Should You Use the Listing Agent When Purchasing a Home? | Zillow Porchlight
Hopefully this helps to explain some of the basics of agency and the different roles that agents play in a real estate transaction. At Kurtz & Company, as both sellers/listing agents and buyers agents, we would love to answer any questions that you have about agency. Feel free to leave us a question or comment on the blog!
Sincerely,
Kurtz & Co.
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