Often during a real estate transaction, there can be some confusion as to who is representing the buyer. In the state of Washington there are four types of agency: listing, selling, non and dual. The first two, listing and selling agency, tend to be pretty straight forward. The listing agent represents the seller, and the selling agent represents the buyer (I know, counter-intuitive). There are also different types of sub-agency within the listing category such as exclusive/non-exclusive, but we will save these for a different post and focus on the buyer side for now. The other two types of agency can sometimes become confusing to the general consumer. They are non-agency and dual agency. Non-agency essentially means that the buyer has no representation, and are representing themselves. Dual agency means that a single real estate agent is actually representing both parties (buyer and seller). On the surface, these definitions are not confusing. However, the confusion usually arises when the buyer does not understand whether they are in a selling agency situation, non-agency situation, or dual agency situation.
Let’s use an open house as an example. Pretend you have been pre-approved by a lender, and have already hired a real estate agent to represent you. You drive by an open house on Sunday and decide to stop in and check the place out. The house actually turns out to be exactly what you want and within your pre-approval amount. So you say to the listing agent holding the open house, “This house is perfect, we’d like to write an offer”. Hopefully, the agent would ask if you have representation, at which point you would respond, “yes, we’ll have our agent get in touch with you”. Simple enough, right??
It’s when you find yourself in this situation but haven’t yet hired representation that you may step into the realm of non-agency or dual agency. Imagine yourself in the aforementioned scenario, but instead you tell the listing agent that you currently do not have an agent. They may respond with something to the tune of, “No problem. I’d be happy to present your offer to the seller. However, please understand through this entire process my sole obligation is to my client, the seller. So any information you decide to share with me, you should expect me to relay it to the seller”. This scenario would place you in a non-agency roll, as the listing agent made it very clear their sole obligation was to the seller.
Now, we’ll go back to the same example, but instead when you tell the listing agent you have no representation, their response is, “No problem. The state of Washington actually allows me to represent both you and the seller simultaneously. So I can help you put an offer together, and then present it to the seller”. This is known as dual agency, as the listing agent is representing both buyer and seller. (Whether or not this is a good idea for both parties will be addressed in a future post.)
Again, the confusion often stems from the fact that the type of agency isn’t always so clear. The actual conversation can sometimes play out like this, Buyer: “We love the house and want to write an offer”. Listing agent: “Hurray, I’ve got a blank contract right here. Let’s sit down and put it together”. There isn’t always the clarification of who, if anyone, is representing the buyer. It’s possible that the buyer doesn’t even realize that if they have already hired an agent, through this scenario they have actually written their agent out of the equation.
I’m definitely not saying that real estate agents are so shady they would intentionally misinform the buyer. Nor am I saying that a buyer would intentionally step into a negotiation without representation. But often, the buyer is so excited they found the perfect house, and the listing agent is so excited to get an offer, things can get lost in translation. So if you ever find yourself in this situation, be sure to ask, “Who’s representing me?”. If you would like more information about buyer agency, or more information about buying a home in general, go to our Calendar/Reservations page and sign up for one of our FREE workshops.
[...] your contract, you will at best end up in a non-agency situation, if not a dual agency one (see “Who’s Representing Me?” for explanation of agency). On-site agents are there to facilitate the sale of THAT development, [...]
Just to comment on your post, I am a real esttae agent in the state of nj. And in this area the builders are suffering because they are not selling there properties. So they are slashing prices just to get the property sold. If you are going to use an agent, it’s best if you use your own agent and not the builders agent for obvious reasons. If you really want the property just place the offer you want (minus the 3% off you were looking for) and see where it takes you. You never know builder might just want to get rid of the property to break even on his investment instead of having it sit on the market.Good Luck!
Get an agent, but do not buy from the lisnitg agent. The lisnitg agent is REQUIRED to represent the best interests of the seller, and you’re going to want to have someone on your team (and ONLY your team). For Sale By Owner is fine, but they don’t always know what they are doing. For instance, they may not be aware that they are required to disclose ALL defects. If you buy a For Sale By Owner, you need to be able to confront them directly about any concerns you have and negotiate all your own terms. Do you know how to write a purchase offer that will hold up in court so that the seller is liable if they misrepresent the property. If you’re BUYING a property, use a reputable agent. The seller pays the commission so it won’t cost you a thing to benefit from their wealth of experience. I have bought and sold a LOT of houses, and I still use an agent for every transaction. They are worth their weight in gold! I’m currently in real estate school, and I can’t believe how much there is too know before obtaining a license. It’s not an easy job, and the piece of mind (as a buyer OR a seller) is priceless.
I would get an agent that will represent you. The buldeir and his agent want all they can get for the home, you don’t want to pay more than you have to, do you? An agent who know the area can help you.