Representation
Why is representation important? The way it was originally explained to me was with a question – would you go to court and use the other side’s attorney? No, no I wouldn’t. I would want my own representation, someone looking after my interests. Real estate deals can be time-consuming, confusing, tricky and costly if the details are not attended to and good, reliable information is not gathered and used wisely.
Many buyers go directly a listing agent because the listing agent has their name on the sign, and the buyer believes that person should know the most about the house and should be able to put together the best deal. However, the buyer doesn’t stop to think that the listing agent is representing the seller and has the seller’s best interest in mind through the language and demands of a listing agreement. The listing agent represents the seller, unless otherwise disclosed to all parties concerned, in which case, if the listing agent has procured agreement from both parties to represent both sides, the agent is practicing dual-agency.
Dual agency is a big no-no unless properly disclosed to both sides of the transaction. Then it is up to each side as to what they want to do. The buyer or seller can agree to have one agent representing both sides or they can refuse the arrangement. This usually comes up when a listing agent has made an agreement with a buyer to be the buyer’s agent and the buyer is then interested in one of the agent’s listings where the agent has a listing agreement to represent the seller. It is not an issue if the agent has a listing and works with a buyer, who happens to call and shows interest in the listing, to purchase the listing and lets the buyer know that the buyer is not being represented by the listing agent.
Confused yet? Sometimes even I get confused. That is why if I am working with a buyer as the buyer’s agent and I am going to show this buyer one of my listings, I quickly advise the buyer that he/she can get another agent to represent them in the purchase of this particular home, since I also represent the seller. Some people in the real estate industry believe that dual-agency results in no representation at all, that an agent can not serve two masters. I tend to agree for the most part, except in cases where both parties trust the agent totally to put together a fair and equitable deal. This is tricky business, and the best scenario is for both sides to have their own representation.
Tomorrow, I will go into this a little further and talk about commision splits -- where all the money comes from and goes, and why. Right now I have to go represent a seller. Later this afternoon, I have to represent a buyer. I’m dizzy! But, I can handle it, because I know who I owe loyalty to in both cases. See ya tomorrow