Types of Real Estate Agent Representation
A real estate agent is a key resource in real estate transactions. The type of real estate representation you receive is dependent on the type of transaction and the parties involved. Be informed from the start!
Understanding Real Estate Agents
This informative guide is intended to help you understand more about how real estate agents work during the real estate buying and selling process. Various factors impact the different ways a real estate agent may represent and work with you during a real estate transaction. Before you go forward with your real estate deal, learn more about the services agents offer, how agents are paid and especially, their role in representing clients.
Roles of Real Estate Agents
Real estate agents are professionals that must complete specific training in order to receive a real estate license. An agent may work independently or as part of a larger agency, like Keller Williams Professionals of Asheville.
The seller’s agent represents the client throughout the sales process. When a real estate agent works as the seller’s agent, they represent only the interest of the seller. To begin the process of listing your property for sale with a real estate firm, you are required to sign a Listing Agreement. The Listing Agreement authorizes the firm and its agents to represent you in dealing with buyers as your seller’s agent. As part of the Listing Agreement, you must usually agree to allow agents from other firms to help find buyers for your property.
Before you sign the Listing Agreement and move forward with a real estate firm, ensure you understand the details of the relationship including the duties to the seller, compensation and time frames.
Duties to the Seller
For most Listing Agreements, the listing firm and its agents must:
- Represent and promote the best interests of the seller
- Be loyal to the seller
- Follow all lawful instructions from the seller
- Provide the seller with all material facts that may influence decision making
- Use reasonable skills, care and diligence in executing the sale of property
- Account for all financial transactions handled for the seller
Before you sign the Listing Agreement, don’t tell the listing agent anything you wouldn’t want a buyer to know! They’re not bound to protect your interests until after the Listing Agreement is signed. Once signed, the firm and its agents may not give any confidential information to prospective buyers or their agents without your permission so long as they represent you under the Listing Agreement.
Services Provided by a Seller’s Agent
To help sell a property, the seller’s agent works on your behalf to promote the property in order to find a buyer. Also, the agent manages timelines, communication and the closing details for the sale of the property.
- Provide advice and assistance to properly price the property
- Advertise and market the property at the expense of the firm
- Give all property disclosure forms required for the sale of property
- Negotiate the best price and terms for your interests
- Review all written offers with you
- Promote your interests as needed throughout the sales process
Compensation to the Real Estate Firm
A seller’s agent offers a service that includes many costs associated with the real estate transition, including the firm’s and agent’s time. The Listing Agreement includes the compensation rate and how it will be paid. The compensation is usually in the form of a sales commission based on the final sales price of the property. The Listing Agreement also must state whether the seller allows the firm to share its commission with agents representing the buyer.
A buyer’s agent represents the interests of the buyer in a real estate transaction. If you decide to work with a real estate firm to purchase property, a buyer’s agent is a smart relationship to establish. A buyer’s agent helps you locate a property and manage the details for the real estate transaction.
Duties to the Buyer
When a real estate firm and its agents represent the buyer, they must:
- Represent and promote the best interest of the buyer
- Be loyal to the buyer
- Follow all lawful instructions from the buyer
- Provide the buyer with all material facts that may influence decision making
- Use reasonable skills, care and diligence in executing the purchase of property
- Account for all financial transactions handled for the buyer
Before you agree either in writing or verbally to have a firm or agent represent you, don’t share any information you don’t want the seller to know. They’re not bound to protect your interests until after they agree to represent you as a buyer’s agent. Once agreed, the firm and its agents may not give any confidential information to prospective sellers or their agents without your permission so long as they represent you.
Services Provided by a Buyer’s Agent
- Help the buyer locate a property to purchase
- Negotiate with the seller on the price and terms
- Recommend preferred professionals to assist in the buying process, like the home inspector
- Work with the seller’s agent to ensure all deadlines and paperwork for the closing are completed
Compensation to the Real Estate Firm
For most real estate transactions, the seller’s agent collects a commission from the seller and pays a portion of the commission to the buyer’s agent for their assistance in finding a buyer for the property. In most cases, the buyer is not responsible for paying the real estate firm unless they’ve agreed to specific fees in writing.
A dual agent in a real estate transaction represents both the buyer and the seller. This is referred to as a Dual Agency Relationship. Dual agency most often occurs if the seller’s agent finds a buyer for the property from a client the agent is representing as a buyer’s agent. If this occurs and you have not already agreed to a dual agency relationship in your listing agreement, your listing agent will ask you to sign a separate agreement or document permitting the agent to act as agent for both you and the buyer.
When you enter a dual agency relationship, the agent is no longer working to protect only your interests. They work to manage the real estate transaction for both parties, including deadlines and required paperwork. However, they no longer can negotiate specifically on your behalf regarding price.
A dual agent is required to keep confidential information private for either party unless granted permission by the party. A dual agency relationship can be beneficial if a seller’s agent knows a buyer that would be interested in the property.
To avoid any unnecessary confusion, make sure you understand your relationship with the dual agent and the specific services the agent will provide on your behalf.
Find the Best Real Estate Agent Relationship for Your Needs
Here at Keller Williams Professionals of Asheville, we want our clients to receive the best representation for your needs. We work with each client and each real estate deal to determine the best relationship for you to buy or sell real estate. The key is to understand the relationships, services and compensation from the start!
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Our agents receive extensive training and are equipped with the latest technology to help you find your next home. Most importantly, they love working with people just like you!