"Who exactly is my real estate agent representing?" This is a question I am sure many home buyers and sellers have asked themselves in the course of a real estate transaction. Agency relationships can be a bit confusing, but understanding them is an essential element when buying or selling a home. Know clearly who is representing your best interests. This is the key to having confidence and security that you have received the best deal possible.
Making The First Move
In North Carolina, it is required that upon first substantial contact , a real estate agent must present you with the "Working With Real Estate Agents" brochure. Not only must they present this to you but they are required to go over it with you in detail explaining your options regarding the type of agency relationship you choose to allow this agent to work under. You will be asked to sign it and the agent will keep that portion for their records and you will be given the rest to keep as a reference. Keep in mind that this is for your protection and by no means creates an agreement or contract with the agent. An agent's loyalty is to the person they have established an agency relationship with, and they have a duty to inform them of any facts that will procure a better deal. Therefore, never disclose any confidential information to a real estate agent unless you have agreed to enter into an agency relationship with them and they are working for you!
"Caveat emptor" Let The Buyer Beware.
Originally, buyers in a real estate transaction had no representation. This began to change, as buyers demanded it. Now when you contact an agent as a potential buyer, you have several different options available. If you are not sure whether you want to work with this particular agent only, you can choose the "nonexclusive buyer agency". This will allow you representation, but not limit your dealings with other agents. Although this agreement may be oral it must be reduced to writing prior to making an offer. On the other hand, if you are sure that this is the agent you want representing you then the "exclusive buyer agency" is the route to take. This agreement must be in writing from its formation. The loyalty of your agent is the same in either situation, however in the latter you are prohibited from working with any other agents. Lastly, if you do not want to make an agreement with the agent at that time, they can still show you a listing as a "seller's subagent". Keep in mind, in this situation, that their loyalty is with the seller.
Sellers--Go With The Flow
Sellers often deal with issues slightly less complicated. When you list your home you sign an "exclusive right to sell listing agreement" with the firm, and by virtue of this agreement all agents of the firm represent you. Also, allowing the agent to place your listing on a multiple listing service (MLS), makes all agents belonging to that service now your subagents, unless of course they have entered into a buyer agency agreement with their client. Caution sellers; a buyer's agent is not working for you.
Know What Kind Of Relationship Your In
Most sellers and buyers agree to a "dual agency addendum". This allows the seller's agent to show the property to prospective buyers that contact them directly. The buyer's agent will be able to show listings within their own firm. With dual agency, the agent has a fiduciary duty to each of you, equally. There is an alternative called "designated agency", whereby one agent within the firm is appointed to represent the seller, and another agent within the firm is appointed to represent the buyer. A high level of care skill and diligence is provided when you enter into an agency relationship with your realtor. Understanding these concepts gives you the knowledge to choose the agreement that fits your needs. The relationship you have with your agent can be a rewarding one, so choose wisely.
About the Author
Mark G. Jackson is a long time resident of Asheville, North Carolina. He is a real estate agent and investor in the Western North Carolina region. He currently works for the John Carroll real estate office in downtown Asheville and specializes in finding the best properties for clients interested in the Asheville real estate market. Mark can be reached at www.theskysthelimitasheville.com.