We see it everyday, potential home buyers contacting the listing agent of a home either by dialing the number on the sign in the front yard, or finding their contact information on the internet. Although the agent is friendly and would “love to help”, most buyers don't to realize that the listing agent (name on the sign) represents the home seller, not the buyer!
Robert Bruss, a nationally syndicated real estate columnist, asks “Do homebuyers need their own “buyer’s agent?” His answer is “Yes!”Why? “The reason is a buyer’s agent, who is truly looking out for the buyer’s best interests and using the best efforts to find a house or condo meeting the buyer’s needs, will emphasize to the buyer the pros and cons of each residence inspected.” (Bruss, Robert. 2006. "Do homebuyers need their own 'buyer's agent". Naples News, retrieved May 28, 2006).
Before the introduction of Buyer's Agency relationships, realtors® owed fiduciary responsibilities to the seller only! Often times, this was true even when an agent was working with the buyer to draft an offer of purchase! If the agent knew key confidential information that could influence, let's say purchase price, he/she was bound by the agency relationship with the seller and could not legally inform you, the buyer, of that information.
What am I talking about? How about knowing that the seller is in a hurry to sell for financial reasons? Or, the seller is relocating to a new city and needs to sell this home prior to purchasing a new one? As a professional negotiator, either of those pieces of information would be crucial in my formulation of a purchase offer.
Now, let's look at it from another angle. You innocently inform the listing agent how much you are willing to spend when you first walk through the home. Since the listing agent has a fiduciary responsibility to the seller, that agent is bound to inform the seller of your maximum purchase price for their home. Remember, the listing agent is trying to sell their client's home to the highest bidder.
In Alabama, the scenario becomes more confusing for potential buyers. Alabama allows limited consensual dual agency. What does that mean? As an agent, I can represent both sides in a real estate transaction. Now, I am by law obligated to perform fiduciary duties of honesty, integrity, and disclosure, to both parties. More often than not, this scenario creates an unintended conflict of interest. How can an agent represent both parties, keeping both parties best interests in mind, to the best of the agents abilities?
Some listing agents would argue that they would be able to market your home to potential buyers with greater success by selling the home to one of their buyer clients. Sounds good right? For a moment, let’s look at it from the listing agent’s point of view. If the listing agent has a listing, and can sell that listing to one of their buyer clients, the listing agent will make double the commission they would normally make if the buyer was not one of their clients. Make sense? Buyers and sellers together; who do you think the listing agent would rather have purchase the homes they have listed?
The above scenario places both the buyer and seller at a disadvantage. If the listing agent knows that they can double their income from the sale of a particular home, what is the motivation for the sale; your best interests as a buyer or double income potential from the sale?
Another area of concern involves new construction homes. Did you know that the agent working in the new construction development is an agent for the builder? In fact, most new construction homes are sold with the builder's representative handling both sides of the transaction. Recently, I discovered a contract from one of these listing agents where the builder requires the buyer to disclose the maximum amount of money they can borrow! I have yet to be convinced that providing that information to the seller is in any buyers best interest. Would you tell a car salesman the maximum amount you could spend on a new car?
As a buyer’s agent, I represent you. Whether you invest in a new home, an older home, or a condo listed with REMAX, REALTY SOUTH, ERA, or any other brokerage in town, makes little difference to me. What matters most to me is that you find the right home, in the right place, at the right price for you, your friends, or family!
As a Buyer's Agent I will: