WORKING WITH REAL ESTATE AGENTS
by the North Carolina Real Estate Commission
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.
SELLERS
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. |
