Buyer's Agent Why Every Home Buyer Needs One Although understanding the relationships between real estate agents and the buyers and sellers can sometimes be difficult, it is very important that the consumer have a full understanding of the duties and responsibilities of the agent, and to whom the agent owes loyalty. It is you the buyer who will profit by taking a few minutes to become familiar and comfortable with the process. Agent's Duties Before working with a real estate agent, you should know that the duties of the agent depend on whom the agent represents. If you are a prospective seller or a prospective buyer, you should know that the agent who lists the property for sale is the owner's agent and represents only the owner's interests. Also, if you are a buyer and you contact any agent to sell you the property, that agent is almost always a subagent of the listing agent and also represents the seller and only the seller. One common misunderstanding is the thinking that if one contacts an agent, that agent "...works for me”. This is usually not correct. The agent you contact, even if that agent has never met the owner of the house or the listing agent, works for the owner as a subagent of the listing agent. The only time this relationship does not exist is when the buyer enters into an agreement with the agent to represent the buyer as a buyer's agent. And although an agent is obligated by law to be honest regardless of who he/she works for, there are differences in the agent's responsibilities to the buyer or seller. The bottom line here is that if you are trying to buy a home, unless you have a written buyer's agency agreement with a real estate agent, the agent almost always works for and represents only the interests of the seller. If the agent represents the owner, the agent becomes the owner's agent by entering into an agreement with the owner, usually through the written listing agreement used when the house is listed, or by agreeing to act as a subagent by accepting an offer of sub-agency from the listing broker. This is what happens for example, when an agent from one real estate office sells a home that is listed at another office. A listing agent or subagent certainly may assist the buyer but may not represent the buyer and must, by law, place the interests of the owner first. This obligation includes trying to get the most money possible for the seller. This is why under these circumstances, the buyer should not tell the agent anything the buyer would not want the seller to know because an seller's agent must disclose to the seller, any material information known to the agent. So don't tell the listing agent or subagent, "Well I might spend as much as $250,000 if I have to"...unless you want that information shared with the owner. An Agent Can Represent the Buyer Only With A Written Agreement If the agent represents the buyer, the agent becomes the buyer's agent by entering into an agreement to represent the buyer, usually through a written buyer representation, commonly referred to as buyer's agency. Although a buyer's agent can assist the owner, he/she does not represent the owner and must place the interests of the buyer first. And of course, if a real estate agent is representing the buyer, the owner should not tell the buyer's agent anything the owner would not want the buyer to know because a buyer's agent must disclose to the buyer any material information known to the agent. There are circumstances in which dual agency could exist. An agent is required to inform both buyer and seller in the case that the agent or another agent licensed with the same broker is representing the seller and buyer. Both parties must agree and acknowledge in writing the existence of such a relationship and agreement that it exists. Although this is perfectly legal, I do not normally do dual agency as I find it very difficult to represent both sides and I feel more comfortable giving my full attention and loyalty to my clients. My recommendation is that if you are considering purchasing a home, use a buyer's agent. There is almost never any cost to a buyer to have a buyer's agent because the seller pays the commission and this is the only relationship in which you, as a buyer, have your own representation. The agreement normally obligates you to use the buyer's agent exclusively and so the agent is watching out for your interests only. And remember, having a buyer's agent does not mean you cannot choose another agent's listings and in fact, if you happen to go to an open house or other situation where you see a home, it is recommended that you inform the listing agent that you have a buyer's agent. This way the agent knows a buyer's agency exists and will treat you accordingly. The analogy I use to explain the buyer's agency relationship is the following: You are involved in a legal action against your neighbor. You walk into court and your neighbor and his attorney are sitting at the table. The judge asks the name of your attorney and you say to the judge, "Oh your honor, that's ok, I don't have an attorney. I'll just use my neighbor's attorney.” Would you do that? Certainly not! So don't use the seller's agent to represent you either. Always use a buyer's agent.