This is long and
seemingly tedious, AND it is very important.
Especially with all the new condominium construction in Charlotte, NC.
Who Represents You in a Transaction? Be Informed.
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Working with Real Estate Agents
When buying or selling
real estate, you may find it helpful to have a real estate agent assist
you. Real estate agents can provide many useful services and work with you
in different ways. In some real estate transactions, the agents work for
the seller. In others, the seller and buyer may each have agents. And
sometimes the same agents work for both the buyer and the seller. It is
important for you to know whether an agent is working for you as your
agent or simply working with you while acting as an agent of the other
party.
This article addresses
the various types of working relationships that may be available to you.
It should help you decide which relationship you want to have with a real
estate agent. It will also give you useful information about the various
services real estate agents can provide buyers and sellers, and it will
help explain how real estate agents are paid.
Seller's
Agent
If you are selling
real estate, you may want to "list" your property for sale with
a real estate firm. If so, you will sign a "listing agreement"
authorizing the firm and its agents to represent you in your dealings with
buyers as your seller's agent. You may also be asked to allow agents from
other firms to help find a buyer for your property.
Be sure to read and
understand the listing agreement before you sign it.
Duties
to Seller:
The listing firm and
its agents must
- promote your best interests
- be loyal to you
- follow your lawful instructions
- provide you with all material facts that could influence
your decisions
- use reasonable skill, care and diligence, and
- account for all monies they handle for you.
Once you have signed
the listing agreement, the firm and its agents may not give any
confidential information about you to prospective buyers or their agents
without your permission so long as they represent you. But until you
sign the listing agreement, you should avoid telling the listing agent
anything you would not want a buyer to know.
Services
and Compensation:
To help you sell your
property, the listing firm and its agents will offer to perform a number
of services for you. These may include
- helping you price your property
- advertising and marketing your property
- giving you all required property disclosure forms for
you to complete
- negotiating for you the best possible price and terms
- reviewing all written offers with you and
- otherwise promoting your interests.
For representing you
and helping you sell your property, you will pay the listing firm a sales
commission or fee. The listing agreement must state the amount or method
for determining the commission or fee and whether you will allow the firm
to share its commission with agents representing the buyer.
Dual
Agent
You may even permit
the listing firm and its agents to represent you and a buyer at the
same time. This "dual agency relationship" is most likely to
happen if an agent with your listing firm is working as a buyer's agent
with someone who wants to purchase your property. If this occurs and you
have not already agreed to a dual agency relationship in your listing
agreement, your listing agent will ask you to sign a separate agreement or
document permitting the agent to act as agent for both you and the buyer.
It may be difficult
for a dual agent to advance the interests of both the buyer and
seller. Nevertheless, a dual agent must treat buyers and sellers
fairly and equally. Although the dual agent owes them the same
duties, buyers and sellers can prohibit dual agents from divulging certain
confidential information about them to the other party.
Some firms also offer
a form of dual agency called "designated agency" where one agent
in the firm represents the seller and another agent represents the buyer.
This option (when available) may allow each "designated agent"
to more fully represent each party.
If you choose the
"dual agency" option, remember that since a dual agent's loyalty
is divided between parties with competing interests, it is especially
important that you have a clear understanding of
- what your relationship is with the dual agent and
- what the agent will be doing for you in the transaction.
BUYERS
When buying real
estate, you may have several choices as to how you want a real estate firm
and its agents to work with you. For example, you may want them to
represent only you (as a buyer's agent). You may be willing for
them to represent both you and the seller at the same time (as a dual
agent). Or you may agree to let them represent only the seller (seller's
agent or subagent). Some agents will offer you a choice of
these services. Others may not.
Buyer's
Agent
Duties
to Buyer:
If the real estate
firm and its agents represent you, they must
- promote your best interests
- be loyal to you
- follow your lawful instructions
- provide you with all material facts that could influence
your decisions
- use reasonable skill, care and diligence, and
- account for all monies they handle for you.
Once you have agreed
(either orally or in writing) for the firm and its agents to be your
buyer's agent, they may not give any confidential information about you to
sellers or their agents without your permission so long as they represent
you. But until you make this agreement with your buyer's agent, you should
avoid telling the agent anything you would not want a seller to know.
Unwritten Agreements:
To make sure that you
and the real estate firm have a clear understanding of what your
relationship will be and what the firm will do for you, you may want to
have a written agreement. However, some firms may be willing to represent
and assist you for a time as a buyer's agent without a written agreement.
But if you decide to make an offer to purchase a particular property, the
agent must obtain a written agency agreement. If you do not sign it, the
agent can no longer represent and assist you and is no longer required to
keep information about you confidential. Furthermore, if you later
purchase the property through an agent with another firm, the agent who
first showed you the property may seek compensation from the other firm.
Be sure to read and
understand any agency agreement before you sign it.
Services
and Compensation:
Whether you have a
written or unwritten agreement, a buyer's agent will perform a number of
services for you. These may include helping you
- find a suitable property
- arrange financing
- learn more about the property and
- other-wise promote your best interests.
If you have a written
agency agreement, the agent can also help you prepare and submit a written
offer to the seller.
A buyer's agent
can be compensated in different ways. For example, you can pay the agent
out of your own pocket. Or the agent may seek compensation from the seller
or listing agent first, but require you to pay if the listing agent
refuses. Whatever the case, be sure your compensation arrangement with
your buyer's agent is spelled out in a buyer agency agreement before you
make an offer to purchase property and that you carefully read and
understand the compensation provision.
Dual
Agent
You may permit an
agent or firm to represent you and the seller at the same time.
This "dual agency relationship" is most likely to happen if you
become interested in a property listed with your buyer's agent or the
agent's firm. If this occurs and you have not already agreed to a dual
agency relationship in your (written or oral) buyer agency agreement, your
buyer's agent will ask you to sign a separate agreement or document
permitting him or her to act as agent for both you and the seller. It may
be difficult for a dual agent to advance the interests of both the buyer
and seller. Nevertheless, a dual agent must treat buyers and
sellers fairly and equally. Although the dual agent owes them the same
duties, buyers and sellers can prohibit dual agents from divulging
certain confidential information about them to the other party.
Some firms also offer
a form of dual agency called "designated agency" where one agent
in the firm represents the seller and another agent represents the buyer.
This option (when available) may allow each "designated agent"
to more fully represent each party.
If you choose the
"dual agency" option, remember that since a dual agent's
loyalty is divided between parties with competing interests, it is
especially important that you have a clear understanding of
- what your relationship is with the dual agent and
- what the agent will be doing for you in the transaction.
This can best be
accomplished by putting the agreement in writing at the earliest possible
time.
Seller's Agent Working With a Buyer
If the real estate
agent or firm that you contact does not offer buyer agency or you
do not want them to act as your buyer agent, you can still work
with the firm and its agents. However, they will be acting as the seller's
agent (or "subagent"). The agent can still help you find and
purchase property and provide many of the same services as a buyer's
agent. The agent must be fair with you and provide you with any
"material facts" (such as a leaky roof) about properties.
But remember, the
agent represents the seller—not you— and therefore must try to obtain
for the seller the best possible price and terms for the seller's
property. Furthermore, a seller's agent is required to give the
seller any information about you (even personal, financial or confidential
information) that would help the seller in the sale of his or her
property. Agents must tell you in writing if they are sellers'
agents before you say anything that can help the seller. But until
you are sure that an agent is not a seller's agent, you should avoid
saying anything you do not want a seller to know.
Sellers' agents are
compensated by the sellers.
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