Buyer agency forms vary from state to state, but the basics are similar and cover the following:
- Any agent representing a homebuyer must have a written agency agreement defining the scope of the agency.
- Buyer’s agents act solely on behalf of the buyer and owe the buyer their loyalty.
- All information between agent and buyer that would weaken the buyer’s bargaining position is to be kept confidential.
- The buyer’s agency accounts for all earnest money deposits in the trust account.
- An obligation exists to disclose to the seller and other agents on initial contact that a buyer’s agency exists.
Of course, this agency agreement does not permit the agent to misrepresent the buyer’s financial condition or ability to perform when presenting an offer.
In those cases when an agent represents both buyer and seller it’s called dual or limited agency. There is some controversy with dual agency, and in some areas brokers feel the potential liability is great enough to avoid it. But, the majority of brokers will work with you, and usually both sides are happy with the results. Most problems associated with dual agency have been the agent’s failure to properly disclose that he was working for both parties.
State real estate regulators consider failure to disclose one of the cardinal sins. As with other agency agreements, dual or limited agency paperwork will vary from state to state, but the common framework is: (1) an agent who represents both buyer and seller must have a written agreement with both parties consenting to and defining the scope of the limited agency, and (2) because an agent who acts for both buyer and seller is in a contradictory position, the agent must be neutral and cannot disclose any information that will harm either side’s bargaining position.
An emerging concept called transaction brokerage is gaining momentum across the country. A transaction broker works with the consumer without establishing an agency relationship. The agent in effect becomes a facilitator working with a buyer or seller to put the deal together. It is hoped that the facilitator option will limit liability for the agent and the seller as well as give consumers a choice of how they want to be represented.
From the consumer’s point of view, putting the agents under the spotlight to disclose whom they represent is a plus. It discourages misrepresentation and allows a homebuyer to legally tap into the expertise of the agent.
In those cases when an agent represents both buyer and seller it’s called dual or limited agency. There is some controversy with dual agency, and in some areas brokers feel the potential liability is great enough to avoid it. But, the majority of brokers will work with you, and usually both sides are happy with the results. Most problems associated with dual agency have been the agent’s failure to properly disclose that he was working for both parties.
State real estate regulators consider failure to disclose one of the cardinal sins. As with other agency agreements, dual or limited agency paperwork will vary from state to state, but the common framework is: (1) an agent who represents both buyer and seller must have a written agreement with both parties consenting to and defining the scope of the limited agency, and (2) because an agent who acts for both buyer and seller is in a contradictory position, the agent must be neutral and cannot disclose any information that will harm either side’s bargaining position.
An emerging concept called transaction brokerage is gaining momentum across the country. A transaction broker works with the consumer without establishing an agency relationship. The agent in effect becomes a facilitator working with a buyer or seller to put the deal together. It is hoped that the facilitator option will limit liability for the agent and the seller as well as give consumers a choice of how they want to be represented.
From the consumer’s point of view, putting the agents under the spotlight to disclose whom they represent is a plus. It discourages misrepresentation and allows a homebuyer to legally tap into the expertise of the agent.
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