It may seem like a silly question to many home buyers. Yet time after time, I see home buyers not understand there is a legal relationship created between a real estate agent and a home buying or home selling consumer. It is very important to establish from the beginning who does my real estate agent work for in the transaction.
Understanding the real estate licensee- consumer relationship is key to a successful real estate transaction.
Massachusetts Mandatory Licensee- Consumer Relationship Disclosure
So how do you know who does my real estate agent work for? Massachusetts provides a disclosure for consumers to understand the relationship between an agent and the consumer. It is called the Massachusetts Mandatory Licensee- Consumer Relationship Disclosure. It is mandatory this disclosure is provided to you on the first personal meeting to discuss a property.
There are three types of agency relationships that are created. It is important to know what each is because it can affect how you interact with the agent and the outcome of a transaction.
Seller’s Agent- A seller can engage the services of a seller’s agent to list their home for sale. Many times you will here the Sellers’s Agent also be called the Listing Agent. The real estate agent that represents the seller owes the home seller undivided loyalty, reasonable care, disclosure, obedience, confidentiality and accountability. The agent must put the sellers needs before their own and negotiate the best possible price and terms for the seller.
Buyer’s Agent– Alternately a buyer can engage the services of a Buyer’s Agent. In this case the agent represents the home buyer. The real estate agent that represents the buyer owes the home buyer undivided loyalty, reasonable care, disclosure, obedience, confidentiality and accountability. The agent must put the sellers needs before their own and negotiate the best possible price and terms for the seller.
Facilitator- A facilitator helps a buyer and seller in reaching an agreement. A facilitator owes neither home seller or home buyer any responsibilities that come with the other agency relationship other than honest dealings, accounting and disclosure of material defects. But, the agent owes neither party loyalty, reasonable care, obedience or confidentiality. They are there to assist putting the deal together only.
Who does my real estate agent work for? Why is it important?
Generally, the seller is always engaging a seller’s agent and it is not so confusing for a seller. But where it is really important to understand who your agent is really working for, is for the buyer.
It is not unusual for a home buyer to come to me directly on a home I am listing either, though a phone call because they saw a home on the internet or at an open house. They are excited, they have decided to put in an offer. As a seller’s agent I can certainly assist in writing an offer. But in no way can I help you determine the fair market value of the home, help you structure a negotiating strategy, negotiate the best possible terms for you, the home buyer or even recommend certain professionals you may need for the transaction. As the listing agent, I owe my seller fiduciary responsibility, my sellers needs come before yours.
When you as the home buyer come to me as the listing agent I can assist you in submitting an offer, but my job is to sell you the home at the best possible terms and price for my seller. While I have to treat you with honesty and disclose any material defects of the home, my job is to give my home seller every advantage possible within the law.
What team is your agent playing for?
A home buyer going directly to the listing agent is like Tom Brady expecting the Chuck Pagano of the Colts coaching him to a win during Sunday nights game.
Can you see Tom Brady wearing the Patriots jersey, sitting on the Indianapolis Colts bench, expecting Chuck Pagano to coach him to lead the Patriots for a win? Absolutely not!!
This sounds ridiculous. Yet it happens everyday. Buyers get caught up in the excitement and the urgency and fail to fully understand what they are doing until it is to late. There are also home buyers who somehow feel they will get a deal or be advantaged by going directly to the listing agent, in reality there is nothing farther from the truth. For most home buyer’s it is actually a disadvantage trying to buy a home directly from the Listing Agent.
A Buyer’s Agent Can Provide A Home Buyer with Tons of Value
I can tell you there are plenty of good Buyer’s Agents that are worth their weight in gold. They can counsel you on what a home is worth, how to negotiate the best deal, provide you with market data to make informed decision, recommend the best professionals and bring you to a smooth closing, plus much more!
Most of my counterparts across the country that I stay in touch with have been in the business for many years. We do this full time, day in and day out. Helping buyers and sellers gives us the experience that can guide you easily through your next real estate purchase. The best thing for a home buyer is you can be represented by a Buyer’s Agent and the fee is paid by the seller, with no cost to the home buyer!
This article, Who does my real estate agent work for? was provided by Kevin Vitali of EXIT Group One Real Estate. If you would like to discuss Buyer’s Representation on your next home purchase call me at 978-360-0422.