Marge Badois
Phone:
603-770-4690
Mobile:
603-770-4690


Fax:
603-432-7095
Email

 

 

Most people would never consider going into a legal dispute without an attorney or worse yet; consider taking advice from the other person’s attorney. Why then, would anyone buy a home, which is also an adversarial process, without someone looking out for their best interests?   

 

Until the late 80s, real estate was usually sold by a listing agent who represented the seller, and a second agent, the selling agent who brought the buyer to the table, but was actually acting as an agent of the listing agent, often unbeknownst to the buyer. The responsibility of the listing agent, and therefore the responsibility of the selling agent, was to work toward the best interests of the seller to obtain the best possible selling price and terms for the seller. For the most part, buyers were unaware of their vulnerable position. A Federal Trade Commission survey in 1983 revealed that 72% of all buyers believed (in error) that the agent they were working with was representing their best interests. Buyers, feeling that the deck was stacked against them, started demanding that they have equal representation in the transaction: therefore, Buyer Agency was formed.

 

Home buyers are not fullyrepresented unless they have contracted with an agent to represent them as their Buyer Agent. Why should you insist on a Buyer Agency contract? Any agent can provide accurate information, arrange property showings, assist in arranging financing, explain forms and agreements, and monitor the process. Every agent has a duty to deal honestly and fairly with all parties. But, until that agent is under contract with you, they are not responsible for promoting YOUR best interest by doing such things as pointing out reasons NOT to buy a property, negotiating the best price and terms for YOU, including contingencies in the contract that protect YOU rather than the seller, or keeping any information that could hurt your bargaining position CONFIDENTIAL.  

 

Under a Buyer Agency Agreement, the real estate firm and its agents represent you in the acquisition of property.   Not only are they contracting to find you a property to buy, but the agent also must fulfill fiduciary responsibilities to you as a client. This means that they must promote your best interests, be loyal to you, keep any information about you confidential, 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 money they handle for you.  

 

You too have responsibilities under the contract. You agree to cooperate with the agency by providing necessary personal information, obtaining a mortgage pre-approval letter, and to work exclusively with the agency for the term of the contract. This means that you agree NOT to contact other realtors to search for homes. You agree to notify your agency before visiting open houses, or before responding to other broker’s, or before contacting any “For Sale by Owners”. You agree to advise all other brokers that you may have contact with, that you have a Buyer Agency Agreement.       

 

As with any contract for service, your Buyer Agent is entitled to, and deserves compensation for fulfilling the terms of the contract (finding a property for you to buy, as well as fulfilling all the fiduciary responsibilities required). This fee for service can be handled several ways. In most cases, the fee that the seller agrees to pay the Listing Agency contains a portion to be paid out to the Buyer Agent. This is not always the case, so make sure to discuss this with your agent.
 

The whole idea here is fairness; If the buyer is bringing the money to the table to buy the property, shouldn’t that buyer get representation?   The home buyer has a right to full and equal representation and service, just as the seller receives from a listing agent. As consumers have become educated as to how the real estate industry works, they have demanded the same level of representation that had been available only for sellers in the past. Today an estimated 85% of the knowledgeable homebuyers choose to be represented under a Buyer Agency Agreement. The Buyer Agency Agreement assures a Realtor that if you buy in the area covered by the agreement, you will buy through them. It assures you that your Realtor will allocate the resources required to accomplish your objective and that once a property is located, they will be working for YOU.