That Agent Must Revert To A" Facilitator" Status

We' ve all heard the term" Buyer's Agent" or" Exclusive Buyer's Agent" .but what do these terms mean? How are they paid?

What do they do? Aren' t they just another Realtor? The rule, was that the, for many years seller paid the commission. so therefore, all agents involved in the transaction worked for that seller. Not long ago, the real estate industry operated completely different than it does today! It was a" buyer beware" situation. Lawmakers have been trying for years to come up with a way that agents could represent the buyer. legally! This is not true anymore.

As of right now( at least in the state of Tennessee) , everyone involved in a real estate transaction must be made aware of who is representing who. and it must be in writing. When a listing agent takes a" listing" , they enter into a legal and binding contract with the seller to represent them in the sale of their home. This document is a legal part of every real estate contract for purchase. The seller is actually signing an agreement with the real estate firm that the agent represents. The problem arises when the listing agent( or any other agent affiliated with the real estate firm) shows the property. Therefore, every other agent that works with that real estate firm legally represent that seller.

How can they represent the buyer when they are already representing the seller? But guess what? The law provides the solution: The managing broker can" designate" one of the firm's agents to function as a buyers agent to work with that particular buyer. That agent is still in the same office. talking over the same water cooler. and many times has access to the files in the office. The law goes one step further. They do the best they can, but agents are still human. and mistakes occur.

In the event that the" listing agent" actually brings the buyer and writes the contract, it really becomes a sad case. This means that they can no longer represent either side. That agent must revert to a" facilitator" status. At this point, they can only take care of the paperwork involved in the transaction. I' ve seen this done for years, and I don' t believe that most buyers and/ or sellers understand that they no longer have any representation. This agent, the buyer and the seller must sign a document that they understand this new arrangement.

Do you see how this quickly becomes a" conflict of interest" ? True exclusive buyer's agencies do not take any listings. So, when agents advertise that they are" buyer's agents" , be sure to check and see if the company they work for takes any listings. They work exclusively for buyers without this conflict of interest. First and foremost, is the absence of this conflict of interest. What are the benefits of using an exclusive buyer's agent? There's no" bonus" for selling company listings.

They are free to focus on your real estate needs. There's no motivation to push any particular property. They usually function as" consultants" .guiding and educating you on the process of your new home purchase. Most exclusive buyers agents will preview homes for you, look much deeper into the background of the home as well as tell you the negative points about the home( as well as the good points) . They can be your eyes, especially if you, ears and legs are relocating from another town. How are they paid? They normally split the commission that the seller and listing agent have already agreed upon.

Buyer's agents are usually paid from the transaction. The listing firm simply pays the buyer's agent at closing. The law requires that a buyer's agent agreement be in writing, and this is one of the issued discussed at that time. If the buyer decides to remove even this tie to the seller, they can choose to work out a compensation agreement directly with the buyer's agent. There are many wonderful Realtors. that do a really good job. Legally, there are ways around this problem. but you should be aware that the problem exists. But, the conflict of interest is something that is there anytime they show a listing that belongs to their firm.

And decide if you want to take that chance. or hire someone to represent you- 100% .