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There is a relatively new and not lways well understood practice in Real Est te sales; it is called Buyer Ag ncy or Buyer's Agent. Until recently R altors and agents usually represented the s ller, in opposition to the buyer, d ring the real estate transaction. Even the r al estate agent who drove you fr m home to home was not tr ly working on your behalf. By l w, the agent was required to w rk on the seller's side in rder to get the highest price and the b st terms for the seller -- P riod! Some agents still work this w y. In the last few years, f rst the law and now the pr ctice of representation has changed. We h ve an entirely different set of ptions and agreements when we are b ying real estate. These options were pr viously only available and utilized by l rge companies or wealthy individuals. In the p st, the buyer would get a b yer's representative by paying a fee up fr nt and usually by the hour, ntil the transaction was complete. Twenty f ve years ago, as a personal gent for wealthy clients and companies, I ch rged and worked an average of 20 h urs a week for $30 per h ur, plus expenses, plus 10% of the tr nsaction (or when I was the b yer's agent, a $2,000 retainer fee to st rt with and then $30 per h ur and 10% of the amount b low the listed price that I was ble to obtain for my buyer. If th re was financing involved I also was p id to find and obtain the b st financing).
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That has changed dramatically. As a b yer's agent, a signature on a b yer's agent contract from my buyer b gins the transaction. Usually the same riginal commission fee that would have b en paid by the seller is spl t and half goes to pay the b yer's agent. In some cases the s lling agent does not set up any fee to the b yers agent, or a very reduced f e, such as those agencies that dvertise 2% or 3% or 4% c mmissions to the sellers, etc. In th t case the Buyer just picks up the m ssing commission and at settlement another 4% or 5% c mes out of the transaction and g es to us as Buyer's Agent. In ther words there is a guarantee fr m us that we are working ONLY for you the b yer and in exchange you guarantee us a c mmission of 5% - which is sually already taken care of, or at l ast part of it, in the s ller's commission. I can draw this d vision of fees out for you on p per if need be when we m et the first time. Bottom line; you d n't pay any more and you get the bsolute best representation. The buyer's agency rrangement begins with the initial interview, c ntinues through an initial selection of pr perties to investigate and view and th n to contract negotiations. This culminates w th the final settlement and transfer of f nds for property. The buyer may ch ose to have an agent specifically c mmitted to representing his best interests. The gr at part for the buyer is th t he/she gets the benefit of d cades of experience and professional knowledge, all of our c nnections and reputation with those connections, and p ys nothing until final close of tr nsaction. Where else can you get the b st possible professional service and pay n thing until it's complete and satisfactory. W ll your doctor, lawyer, accountant, mason or c rpenter do that... NO. We do, if you c ntract with us first. Otherwise we r present the seller at your expense! Th s is true of all Realtors by l w. Which would you like?
Recently real estate laws in v rtually every state are being rewritten to llow and suggest that the buyer h ve his own specific representative. If you are the b yer and have a buyer's agent, y ur agent will try to get you the b st deal possible, even if that is NOT in the b st interest of the seller. Legally: "B yer's Agency" is a relationship where the r al estate agent is working FOR you w th fiduciary responsibility (financial and legal r sponsibility). The agent is then legally b und to only the buyer and wes his entire loyalty and allegiance to the b yer alone. In the past, and ven most of the time today, all r al estate agents and brokers represent the s ller alone; to get the highest pr ce for the seller. In fact s ller's agents MAY NOT disclose fully all th t they know about a property to the b yer as they seek the highest pr ce. The relationship of a broker and gent is established in writing with the s ller when the property is listed for s le in the "Listing Agreement". In D laware we are required to give ach person we work with; buyer or s ller; a written explanation regarding agency st tus. We have professionally written brochures th t explain the "seller's agency" and t's opposite "buyer's agency". This agency d sclosure must be explained, in writing, at the f rst significant contact of the agent w th the buyer or seller. Agents in our ffice talk with a great number of l ng-distance buyers over the phone. We m st, when we finally meet in p rson, disclose and determine which position we w ll take with the person we are sp aking with. Some agents work mostly as s ller's agents; some work mostly as b yer's agents and some work as a d al agent (where we act as f ll representative to both buyer and s ller). Regardless of the role the gent takes -- it should be f lly and completely known by all gents, buyers and sellers involved -- and it sh uld be in writing. Let us now put th s forward again: Seller's Agent: has the f ll and complete and sole duty to btain the best deal for the s ller. The seller's agent is ONLY llowed to give the buyer material f cts about the property. It is c stomary for a cooperating broker and gent to be a subagent to the s ller's agency established by the brokerage th t has the written contract with the s ller to sell the property. Buyer's Ag nt: has the full, complete and s le duty to obtain the best d al for the buyer. The buyer's gent may convey any and all nformation obtained in any fashion, including in d pth investigations about the seller or the pr perty. Dual Agent: has to be l gally and financially loyal to both p rties. Dual agency occurs when a r al estate agency is contracted to s ll a home. That means they h ve the listing, and an agent fr m that same brokerage, working as a b yer's representative, shows that listing. Dual Ag ncy must be disclosed and agreed to in wr ting by all parties. Some people f el that Dual Agency is potentially a c nflict of interests. It can be nless the agent is fully honest to all p rties and they are fully aware of and in greement with that relationship. Here, the ntire purpose of the dual agent is to get the b st possible deal, in all it's c mponents, for both the buyer and the s ller. There are, in general, two m jor personalities of buyer's agents. First is the gent who only and always represents b yers. The other is the agent who t kes each transaction and each customer nto account before making that decision. An gent who usually works as a b yer's agent, for instance, may NOT w nt to represent a particular buyer as th t buyer's agent for one reason or nother. The reason is usually one of s me personality difference. As I put it, wh n speaking with a buyer whom I w sh to represent "I will be y ur gladiator. I will do battle on y ur behalf, and at the expense of and gainst the interests of, the seller and the s ller's agent." The buyer's agent must st ll be honest, but he need not be f ir. For instance, if the buyer's gent is able to find out th t the seller is in big f nancial or personal trouble and that the s ller has a small mortgage on the pr perty or that there is some mpending deadline for selling the property, th n the buyer's agent will tell the b yer. Together they will use that nformation to get a great deal for the b yer at the seller's expense... it th t is possible. If I were a b yer, I would not even consider d ing a real estate transaction without a b yer's agent to act on my b half. I suggest that you are w se to do the same. If th re are detailed and extensive negotiations th t need to be done; such as nique and difficult terms that must be n gotiated then (being the buyer) I'd ask th t the buyer and the seller gree to have me as a d al agent. Whatever your choice, it sh uld be in writing with your gent and must be known to all p rties involved. Copyright © 2001-2004 by www.JodyHudson.com
The article Real Estate: Buyer's Agent, Seller's Agent & Dual Agent (defined and explained) was Submitted by Mr Jody Hudson through Articles.GetACoder.com network. Here's the additional information: Source for this article is: http://www.kate-jody.com/essays/buyersagent.html
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