When you’re looking for the right home you might find yourself with an endless sequence of choices. House or condo? Suburban or city center? But there is one particular choice that bothers a lot
Who Represents You In A Real Estate Transaction
Knowing which type of relationship you have with your agent, and his broker, will help you negotiate the best possible deal, whether you’re a buyer or a seller.
When you hire a real estate agent, it’s important to understand whose side she’s on as you select a home to buy (or list your current home for sale) and head towards closing, where the actual transfer of ownership happens. There are a lot of ways agents may represent clients. Yours might represent:
Only the other parties in the transaction
Everyone in the deal
By knowing where your agent’s loyalties lie, you’ll know what you can tell her and what you can’t. (If, for example, you’re dealing with an agent who doesn’t represent you but is representing the sellers of a home you want to buy, you won’t want to tell her how high you’re willing to go on the price.) In some states, your agent has to explain the type of representation (also called agency) she’s offering you and ask you to sign a contract identifying who the agent and her broker represent. If an agent doesn’t bring up the subject or ask you to sign a contract, ask about it so you know whom she’s representing.
No matter what form of representation you agree to, watch out for your own interests and understand the six ways brokers and agents represent clients below
1. Buyer’s Agency
Want the agent to represent you and only you when you buy a home so that all the information you share with her is confidential? Opt for an exclusive buyer’s agent.
Who pays the buyer’s agent? Surprisingly, even if you hire a buyer’s agent, you can still ask the sellers to pay his fee. You can pay your buyer’s agent yourself, or ask the seller (or the seller’s agent) to pay your agent a share of their sales commission.
2. Seller’s or Listing Agency
An exclusive seller’s agent represents only the sellers, not the buyers. If your exclusive seller’s agent finds a buyer for your home, he may have another agent — maybe even a co-worker from the same brokerage — represent the buyer in your transaction. In some cases the buyer may have no agent at all. Your exclusive seller’s agent is loyal only to you, so it’s OK to discuss strategy with him.
Who pays the seller’s agent? The seller pays a commission to the seller’s agent from the proceeds of the sale. The seller’s agent may, and often does, share the commission with the homebuyer’s agent.