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A Difference in Representation: Chooing a Sales Agent

Who Represents You?

In 1999 the Oklahoma Supreme Court said: "Sellers' agents and dual agents do not and cannot by law give a buyer the same degree of loyalty as an agent who acts on behalf of a buyer. Sellers' agents owe their allegiance to the seller. Dual agency invites a conflict of interest. A buyer who relies on the seller's agent or on dual agency does not receive the same degree of legal protection as that afforded by an agent acting solely on behalf of the buyer".

"In the traditional, historical relationship a real estate agent was the agent of the seller, and this agency did not extend to the buyer, even though both parties received and relied on information from the agent. The buyer was not represented. The problem with the traditional relationship is that unsophisticated buyers negotiate with brokers who have little or no duty to protect buyers' interests." One government survey has shown that over 70% of all buyers surveyed believed that the cooperating broker was acting as their agent. This misunderstanding by buyers of whether or not they were being represented by the real estate agent with which they were dealing was apparently significant enough that the Oklahoma Real Estate Commission believed the promulgation of a rule was necessary. Oklahoma Real Estate Commission Rule 605:10-15-2 (1996) provides that in every real estate sales transaction involving a licensee as an agent or principal, the licensee must clearly disclose to the buyer and seller the agency relationship or relationships."

Sellers Agent and

Buyers Agent

Can show you all the homes in the MLS (Multiple Listing Service).

Will show you all the homes in the MLS, For Sale By Owner properties, foreclosures and possibly homes that are not on the market

Can tell you the price the seller's are asking for homes but cannot suggest an offering price.

Will calculate the fair market value of the home for you, and assist you in developing an offering price by using comparable sales data.

Can provide "raw" information on comparable homes that have sold in the area. Not allowed to interpret that data for you.

Will provide and interpret information on comparable homes that have sold in the area and help you formulate an offering price and negotiating strategy.

Can convey your offer to the seller or their agent and convey their response back to you.

Will negotiate on your behalf through the entire home buying process offering advice and information every step of the way

Can provide you with a "favorite list" of title companies, home inspectors, and other professionals for you to choose from.

Will recommend title companies, inspectors, and other professional services you will need.

May tell you some general information about the seller

Can tell you everything they can find out about the seller and their motivation for selling

Must tell the seller everything they know about you, your financial status, and your motivation for buying

Will keep any information about you confidential if it would weaken your negotiating position!

"Thinks" in Seller's terms (i.e.: Get the highest price possible for the home)

Thinks" in Buyer's terms (i.e.: Get the lowest possible price and best terms for the Buyer, not the Seller).

What Is An Exclusive Buyers Agent?

Buyer's Agents are advocates of the buyer. A Buyer's Agent can legally put the buyer's interest first and negotiate in favor of the buyer for a lower price and better terms. However, a few of agents may say they are Buyer's Agents also take listings, and spend most of their time selling homes -- not representing buyers. They practice dual agency.

According to the National Association of Realtors® publication 'Agency - Choices, Challenges, and Opportunities', Exclusive Buyer Agency is: "The practice of representing only buyers and never sellers in a transaction. The company never lists a seller's property and thus never has a seller as a client. Agents never accept subagency that is offered by a seller's agent" (pg. 25).

Recently, a lot of traditional Agents have started advertising that they will represent buyer's. While this is legal in most states even the National Association of Realtors® warns it's members: "Buyer agency is viable method of practicing real estate, but an agent should be cautious in his/her approach if he/she is not thoroughly knowledgeable about the entire process. Agents who are used to working with buyers as seller's subagents need to be aware of the new duties and potential liabilities of buyer's agents before changing the form of representation they offer." (pg. 18).

This publication goes on to say that Exclusive Buyer Agency "Promotes a more natural relationship for agents working with buyers" (pg. 26).

In talking about an agent who tries to offer both seller agency and buyer agency it states "The buyer and seller do not have the full range of representation" (pg. 27).

Any agent who lists properties for sale is used to representing sellers and has a legal commitment to protect the sellers interest. The agent must get the highest price possible for the property.


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