Working With A Buyer's Agent
Right At Home
Daily: Finding It: House-Hunting
By Samuel J. Tamkin for Right at Home Daily
In most states, homebuyers have the option of
working with a buyer's agent, who owes the buyer his or her fiduciary duty,
as opposed to the seller. A conflict of interest could arise, however, if the
buyer's agent also accepts the seller as a client. If the agent takes a homebuyer
to see one of his or her listings, the buyer may soon be without any representation
because the agent is then a dual agent.
To
avoid such a conflict, hire an exclusive buyer's agent (EBA) because
they never represent sellers. Occasionally, your EBA might represent two buyers
who are interested in the same property. In that case, another EBA in the agent's
office can help one of the buyers make an offer.
The only document the buyer will have to sign
is an agency agreement, which explains who will represent the buyer (buyer's
agent, seller's agent, or dual agent) in the transaction. Traditionally, the
buyer is not locked into using the agent and may switch at any time.
When working with an EBA, the buyer may be asked
to sign an exclusivity agreement, which outlines the exclusivity of the arrangement
and the timeframe. The agreement may also state that the buyer is responsible
for the agent's commission.
Though the buyer's agent's contract appoints
the buyer as payer of the agent's commission, in practice the buyer's agent
receives a portion of the seller's agent's commission.
Don't be shy to request contract modifications.
If the agent balks at such a request, consider another agent.
Though an EBA is one way to avoid dual representation,
it may be difficult to find an EBA who is as familiar with the market in your
neighborhood of choice as a buyer's agent is. Only you can decide what's more
important: An agent who knows your neighborhood or an agent who remains exclusive
to you.
Samuel J. Tamkin is a real estate attorney based in Chicago.
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