When hiring a real estate agent to help buy or sell a home, you expect the agent to work in your best interests. There are, however, a few instances when an agent’s loyalties are split. It’s important to know how agents work and how they get paid before you sign on the dotted line.
A buyer’s agent represents the buyer. Sounds simple enough. An exclusive buyer’s agent works only with that particular buyer for that particular transaction, which provides 100 percent loyalty and confidentiality during negotiations. Look for the exclusivity clause in your contract.
An exclusive seller’s or listing agent represents the seller’s best interest in the home sale in a similar fashion, which protects the seller during negotiations. Once again, look for the exclusivity clause in your contract. Until a listing agreement is signed, be careful not to disclose confidential information. It’s possible both the exclusive buyer’s agent and seller’s agent will be from the same broker/office.
Sub-agencies can be tricky and confusing. For example, if you see a home on a real estate portal and call the seller’s agent to inquire about it, keep in mind the agent works for the seller — not you. Do not disclose any information to them that might be helpful in negotiations, such as your financial well-being or your reasons for relocating. However, the agent is bound by ethical responsibility to be fair and provide any material facts, such as a leaky roof, to a potential buyer.
Dual agents represent both buyer and seller. If it sounds like a conflict of interest, it could be. Many states — and some firms– don’t allow for dual agency. Dual agents works with both sides to finalize a sale, acting as referees between the parties. The agent must disclose in writing that he or she is acting as a dual agent.
Agent compensation. Traditionally, the seller pays a commission to the seller’s agent from the sale of the home. The commission fee is then shared with the buyer’s agent.
