For most people, buying a home is their single biggest investment. The process is filled with many complex details that may seem confusing and complicated if not properly understood. The rules are generally governed by the contracts agreed to between buyer and seller. These contracts are typically drawn up by the attorneys for the companies that make up each MLS association across the country. They draft these agreements to reconcile state laws and the court cases of each state where problems arise between buyer and seller.
In the past, agents were legally obligated to protect the interests of the home seller. Today, in our consumer oriented society, that model has been replaced. Agents who represent buyers have the legal duty to protect those buyers under state agency laws. The most recent changes to the business of real istate is the introduction of homebuyer agreements. Homebuyers are choosing to have their own real estate agent, a contracted buyer's agent, to legally represent them under a written agreement.
In every case where an agent is a buyer’s representative is involved, under contract or not, the agency law requires specific represenation for you, the buyer, not the seller, and has full fiduciary duties, including loyalty to the buyer. By definition and law, the buyer’s agent has your best interests in mind throughout the transaction. The percentage of homebuyers with buyer representation has grown significantly in the past decade. According to a recent National Association of Realtors® survey, nearly half (46%) of home buyers used the services of a buyer’s agent last year, and four out of every five buyer’s agent agreements were in writing.
The following points are presented at the beginning of every transaction on a document called the Agency Disclosure regardless of whether or not there is a contract between the buyer and his agent . The buyer’s agent and the homebuyer establish by mutual agreement and in writing, known as a buyer's agency agreement, that will entitle the homebuyer to:
Loyalty: The real estate agent has a fiduciary resposibility, the highest protection under the law, to act in the best interest of the buyer.
Reasonable Skill and Care: Performing the job of an Agent with the utmost care, integrity and honesty. Some of the tasks include; Assisting in the determing a purchase price, resourcing professionals in the discovery of material facts, and investigating the material issues important to the buyer.
Disclosure: All material facts such as relationships between agent and other parties, existence of other offers, status of deposits, and legal effect of important contract provisions.
Confidentiality: Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties. Accounting in dealings. Negotiaing you your behalf without compromsing your position or disclosing unnecessary knowledge about you.
Buyers Agency Agreements
There are two types of buyers agency agreements. One is where the agent is compensated by the buyer regardless of what the buyer purchased and the other simply defines and clarifies the legal considerations between buyer and the agent. Buyers should be aware and ask the question about how the agent is compensated since there are legal remifications. For example, if the buyer under a buyers agent compensation agreement innocently discovers that his friend is selling a home he can purchase and makes an agreement to buy his house without agents. The buyer may be obligated to pay a commission to his buyers agent even when the agent was not involved in the process.
Using buyers brokerage agreements is helpful between buyers and their agents because they do make clear the duties and responsibilites of the agent and a buyer.
