Buyer Beware... Know who your agent is working for...
Agency is one of the most overlooked aspect of buying a home for home buyers. Looking at homes is fun, but paying attention to the details are not. I have run into many buyers who have overlooked their agency relationship until there is a problem. Then they scratch their head and say I thought they were working for me. Here is a very common scenario.
Who is this agent working for?
You meet Mary at an open house of a house you are interested in.
Mary is of course:
- Very willing to help
You decide on the spot to make an offer afraid you will lose the property. Mary has encouraged you because there has been many people through the open house and she is expecting multiple offers by that evening.Big Question?
Who is Mary working for?
That can vary, most often she is a Seller's Agent. Her job is to sell the house to every person who walks thru the door. She owes you no fiduciary responsibility, no confidentiality, and no loyalty. Of course she is nice she wants to sell you the house, as a matter of fact she owes it to the seller.
Mary's job is to sell that house at the highest possible price to everyone who walks though the door.
Later you find out there were no multiple offers, you overpaid for the house (your neighbor bought the identical house for $15,000 less last month) and Mary was not able to recommend a good home inspector, you were on your own.
Buyer's know who your agent is working for, it can be confusing at times. You can be represented by a buyer's agent at no cost to you. A good buyer's agent can save you time money and aggravation unlike Mary, they do owe you fiduciary responsibility, confidentiality and loyalty.
At an open house, an agent should have a sign at the sign-in saying what their agency relationship is during the open house. If you meet an agent for the first time to talk about a specific property, an agent by law is suppose to provide a two page disclosure explaining agency and the relationship you have with that agent. It is the law. There are a few agency relationships you need to understand, so it does not come back to haunt you. They are:
- Seller's Agent
- Buyer's Agent
- Dual Agent
- Designated Agency
- Non-Designated Agency
Here is a pamphlet that explains agency
. Whether you are a buyer or seller, take the time to understand the relationship of you and the agent you will be working with. It will save a lot of headaches down the road.