Real Estate Guide: How do I make sure my Broker represents me?

What Are the Different Types of Real Estate Representation, and What Do They Mean?

When you work with an agent in a real estate transaction, you’re either a client or a customer of that agent. There is a difference, and it’s important.

A client has a brokerage relationship with a Realtor®: The client has signed a contract and is legally represented by that Realtor® and the Realtor®’s brokerage. Every other person who’s party to that transaction is considered a customer of that Realtor®. The Realtor®’s primary fiduciary responsibility is to the client.

In real estate transactions, there are two main types of representation:

Seller representation: If you are selling a property and enter a brokerage agreement with a Realtor®, that Realtor® and their firm become your representative during that specific transaction. They are legally obligated to represent you and your financial interests as a seller.
Buyer representation: If you are buying a property and enter a brokerage agreement with a Realtor®, that Realtor® and their firm become your representative during that specific transaction. They are legally obligated to represent you and your financial interests as a buyer.

Representation is straightforward if the buyer and seller agents are affiliated with different companies. However, when the agents on opposite sides of the transaction work for the same brokerage, representation and agency become more nuanced and complex.

These are the four most common types of agency and what they mean:

Seller agency: A Realtor® from Brokerage A represents the seller in a transaction. This Realtor® looks out for the best interest of the seller in the transaction, and owes the buyer honesty and any material facts about the listed property that are needed to make an educated decision.
Buyer agency: A Realtor® from Brokerage B represents the buyer in a transaction. This Realtor® looks out for the best interest of the buyer in the transaction, and owes the seller honesty and any material facts that are needed to make an educated decision.
Dual agency: One Realtor® from Brokerage A represents both the buyer and the seller in a transaction. This Realtor® represents the buyer and seller equally and owes confidentiality to both parties. Realtors® in a dual-agency relationship facilitate the entire transaction and may not provide full advice to either party due to confidentiality.
Designated agency: Real estate Brokerage A represents both the buyer and seller, with one Realtor® from Brokerage A representing the seller and a separate Realtor® from Brokerage A representing the buyer. The brokerage represents the buyer and seller equally, owes confidentiality to all parties and may do nothing to the detriment of either the buyer or the seller.

That’s a high-level overview of representation and agency. But it’s important to note that agency law varies from state to state, and this article is intended to apply to our New York location.

Reblogged from original article here.

SOLD in 42 days

Sold June 2016 by Joanna Lane for $354,000
Clean, light, bright and airy describe this recently retouched 3 bedroom, 1 1/2 bath home with a flexible floor plan located in a desirable location close to Southold Town and Goose Creek Beach.

CLIENTS & PARTNERS

Representing Private Individuals in their Real Estate transactions, and serving the needs of Corporate clients in London, U.K. and New York, U.S.A., since 2001. Our partners and affiliates include:

Property Management: KeyTurners

Intellectual Property: Alan Sack, IP Attorney

Selected Corporate and Private Clients: William Hurt, Merril Lynch, GE Capital, Booz Allen Hamilton, Metrolife Inspections, Groundwork Inspections, Dominican Sisters.

Sold & Rented Properties

2017 –

Under Contract: 4.3 acre Traditional Post and Beam in Private Southold Beach Community. Last Listed: $1,299,000, Representing the Buyers.

2016 –

1705 Custer Ave, Southold, NY

403 Lilac Lane, Cutchogue, NY

870 Bay Home Road, Southold, NY

1450 West Lane, Southold, NY

2015 –

1852 North Bayview, Southold, NY

435 Main Street, Greenport, NY

5th Street Multi-occupancy Apartment Building, Greenport (2 units)

A203 Cliffside Resort Condominiums

B203 Cliffside Resort Condominiums

A201 Cliffside Resort Condominiums

2nd home on McCann Lane, Greenport, NY –

Primary Residence: Sebastian’s Cove, Mattituck – walls of glass, architectural gem, built from the ground up in exclusive residential community

Southold, NY – year round rental in Founder’s Village with beach rights in private community, walk to Town

Buyer Representation

It’s easy to find out what is on the market, visit open houses and even research sales data to come up with a reasonable price to offer for a home. So why would a buyer want to hire their own agent?

In a nutshell: to protect your interests as the prospective buyer in an expensive, often complex purchase that can become even more complicated by the labyrinthine of local zoning and custom. The major difference between a buyer’s agent and a seller’s agent is that we work exclusively on behalf of the buyer. A seller’s agent is constrained by their fiduciary duty to the seller – in general terms, this means they can’t or won’t disclose things about the property that might hurt the seller in negotiations, which if you’re buyer, means they are holding things back from you that could help inform your decision to buy or not and at what price. Working with your own agent representing you in the transaction, not the seller, the buyer broker’s fiduciary is only to you as the buyer. Most commonly, a buyer’s agent might help negotiate with the seller for a smaller purchase price for the house. Or help negotiate for closing costs or other concessions, find a real-estate lawyer to examine the sales contracts and an appraiser to examine the property being purchased, and many other experts to form a whole team with knowledge and experience to help you navigate challenges at every step of the transaction.

If this isn’t your first purchase, likely you feel confident in the process. In this do-it-yourself era of online real estate listings, it’s tempting to go it alone, but a buyer who relies on the seller’s agent to handle both sides of the deal may not hear about problems with a building, understand the zoning limitations, covenants and restrictions on the land, or have a real advocate during contract negotiations to leverage aspects of the property the selling agent may not even be obligated to disclose.

As a member of the National Association of REALTORS®, NYSAR and the local Hamptons and North Fork REALTORS® Association (HANFRA), with access to the Multiple Listing System of Long Island, Property Angels works with the seller’s agent to show you suitable properties from multiple agencies. The seller always agrees the commission to be paid to their own Broker and to the Buyer’s Broker before the home is listed for sale, so it doesn’t save the buyer anything to go direct to the selling agent and the service they receive is not 100%.

The fiduciary responsibility of a Buyer’s Agent is to you as the buyer, not the seller. In New York, real estate agents must have their clients and customers sign a disclosure form that explains the difference between a seller’s agent, who provides undivided loyalty to the seller, and a buyer’s agent, who represents the buyer’s interests.

Once most buyers find a property they like, that’s when having your own Agent can help most. In almost all cases, the Seller’s Broker is already offering to split their commission with a Buyer’s Agent, and if not offered, we can make it a condition of any offer to purchase that the Seller pays our commission, even though we represent you, not the Seller. Who pays the Broker does not indicate who that Broker represents in the transaction. The only time we can’t give you 100% loyalty as a Buyer’s Agent is if the property you want to buy is our own Listing, meaning we have already contracted with the Seller to represent them. In that case, we can act as Dual Agent if both sides agree, but we cannot provide you as the buyer 100% fiduciary as explained above.

Whether you’re a first time buyer, moving up or moving down, looking for a second home, retirement home, land to build or farm, relocating your business or whatever the reason — there’s paperwork, process and often an emotional roller coaster to navigate as well. Choosing an exclusive buyer’s agent gives you the best representation possible in your purchase. Hopefully, that will be Property Angels.

Here are some articles about Buyer Representation that may also help with your decision:

New York Times: The Buddy System – Buyers Broker Getting Started
The Wall Street Journal: What you Should Know about Buyer’s Agents

Call us today to discuss hiring us to help you purchase your home, or go here and submit an inquiry.

Real Estate Guide: How do I make sure my Broker represents me?

What Are the Different Types of Real Estate Representation, and What Do They Mean?

SOLD in 42 days

CLIENTS & PARTNERS

Sold & Rented Properties

2017 –

2016 –

2015 –

Buyer Representation

Our Location

Industry Focus

Connect With Us

What Are the Different Types of Real Estate Representation, and What Do They Mean?

Sold & Rented Properties

2017 –

2016 –

2015 –

Our Location

Industry Focus

Connect With Us

Our Social Media