How to decide between buyers' or sellers' agents


January 23, 1994|By Michael Gisriel

Q: I am working with a real estate agent to find a new house. The agent has suggested that perhaps she serve as a "buyer's agent." I did not realize there was any difference between agents. And what are "dual agents"?

A: Traditionally, a real estate agent is hired by the seller of a property. This agent is usually referred to as the "listing agent."

If another real estate agent assists the buyer in finding the property, this other agent may be referred to as the "selling agent."

The selling agent is a sub-agent of the listing agent and works for, and is paid by, the seller. Though technically working for the seller, this agent still must be honest and fair to the buyer, and disclose all pertinent information about the property -- if the house sits next to a landfill, the agent can't hide this fact from the buyer.

"Dual agency" usually means that, in a single transaction, both the listing agent and the seller's agent work for the same real estate broker. If this occurs, this must be disclosed to all parties.

Some buyers who want more representation are, more and more, hiring "buyers' agents." In this case, the selling agent works for the buyer. A contract is usually signed between buyer and agent. The buyer's agent works only for the buyer -- helping him find the best house at the best price and protecting the buyer in the transaction.

Normally, the commission for the buyer's agent is paid by the seller at settlement.

This is often done as an addendum to the contract, in which the seller recognizes that the agent is workingfor the buyer but agrees to pay the fee for the buyer's agent anyway.

You should discuss the different agency relationships with a real estate agent. It is important to establish from the beginning whether you will be using a buyer's agent or working with an agent who is a seller's agent.

You should also have dual agency explained if both the listing agent and the selling agent work for the same broker.

In either case, the agent must treat you, the buyer, honestly. But if you want the additional protection of a "buyer's agent," discuss this with the real estate agent with whom you are now working.

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