I have just come off a flurry of listing homes, meeting many agents and potential buyers, fielding many calls and inquiries, which has prompted the topic for this month’s blog...Should I use the Listing Agent when I buy a home?
The Listing Agent or Listing Realtor ® is the real estate sales representative that is representing the seller of the home. This is the agent who’s name appears on the listing documents, promotion, and the sign on the lawn.
As a Listing Agent in a few recent transactions, I received a number of calls from potential buyers who would like to see the property, I had listed for sale. Some of these buyers even retained me as their Realtor ® to represent them to put forth an offer on the home. This means I was providing service to both sides of the transaction, buy and sale of the home. There are things to consider when choosing your Realtor ® and receiving service in this buying and selling process, so let me further explain.
When there is a sale of a home, there are often two Realtors ® involved in the transaction. One Realtor ® for the buyer side, one Realtor ® for the seller side. Sometimes both buy and sell sides are represented by the same Realtor ® . In this case, there are additional things to consider, especially if you are a buyer.
There are two levels of service a Realtor ® can provide a potential buyer. There is a Client Agreement documented with a Business Representation Agreement. There is a second type of Agreement with a lesser level of service known as a Customer Service Agreement. Both Agreements ensure the buyer has professional service. The difference is the Client and their Business Representation Agreement allows more advisory services in the process, the Customer Service Agreement does not. In the case of a Customer Service Agreement, the Realtor ® must adhere to the industry's strict code of ethics, and provide known facts and not provide advice to their customer on price etc.
The reason for the two levels of service agreements, a listing agent can not have two Client Level agreements on the same transaction. The listing agent is typically in a Client Agreement with the seller. Here the listing agent is acting first and foremost in the interest of the seller of the property and providing full advice. Therefore, if the Listing Agent is working with a buyer on a property they have listed, that Agreement with the buyer must be a Customer Service Agreement, and not provide depth of advice. There is a fine line between the two, however, there are clear rules around conduct with our regulatory body.
So, why would a buyer work with a Listing Agent in the Customer Service Agreement? Instead of finding a different Realtor ® and receive full service as a full Client Agreement ? Well often I hear buyers say a few things. Like they don’t have an Agent, or the Listing Agent will know the property better or they feel they will get a better deal. All valid points, and using a Listing Agent demonstrates they are doing business, should know the property well.
However, in a sellers market like now, sellers are often entertaining multiple offers on their home, and often do not feel the need to do any negotiations that would benefit the other side.
Just something to consider, and regardless of what level of service you enter into in a real estate transaction, just ensure the Realtor ® you have decided to work with, is providing you the level of service you need, and you feel comfortable with this major financial transaction in your life.
Should you have any questions about the levels of service or about real estate in general, always happy to discuss your specific needs. Reach out anytime!
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