This Main Line agent is on a mission today to explain something no one seems to understand about the residential real estate business: buyer agency.
Possibly the single largest investment of a person’s life is the purchase of a home. Yet most people know less about the qualifications of the person being paid to guide them through this process than they do about their child’s preschool teacher or their accountant.
Instead, they select the listing agent for the home they like, the person who is distantly related to them, their neighbor, or the person whose yard sign they last saw in the neighborhood.
I met a woman recently who told me this story within the first 5 minutes: She stopped into an open house and told the listing agent she was working with an agent. The listing agent told her she had no obligation to that agent (without asking the facts), contacted her directly, wrote up an offer on her behalf while representing the seller and then later told her the contract terms required her to go forward after an inspection when they did not. Her own agent told her the house she wanted to see was not available when it was and then tried to scare her by saying she owed him a commission when there was no written agreement and he had never shown her the house. No wonder she never wanted to hire another real estate professional!!!
At a MIMINUM, don’t you want to know if the person helping you spend your hard-earned money has an acceptable level of education, has adopted the industry standard code of ethics, works full time at this job and has a good number of satisfied, returning clients? There are thousands of agents out there that don’t meet these minimum standards.
And unless your agent is operating as a buyer’s agent, you are not getting basic protections. This just means you need an agreement with that agent setting forth their responsibilities to you. A buyer's agent (in Pennsylvania) owes specific duties to the buyer, such as loyalty, care, confidentiality, full disclosure and accurate accounting and the all-important requirement that they do what you tell them to do. A buyer's agent will also show you all available homes, point out their features (good and bad), provide financing advice and submit the offer in the best light for you. A listing agent cannot even tell you whether the seller would accept a lower price—DON”T YOU WANT TO KNOW THAT?
Think of the buyer’s agent as the only real estate professional who is required to treat your deal as if it were his or her own purchase. And it usually costs you no more than if you used the listing agent—they just share the same commission amount.
Many companies permit their agents to practice what is called “dual agency”. This is not against the law in Pennsylvania (although it is in other places). They tell you there is no problem with their agents being on both sides of the transaction. Except that the duties of full disclosure and confidentiality are in direct conflict. Which one do they choose? As an example: the inspection reveals stucco may have been repaired many times. Does the agent on both sides of the transaction:
1. question the seller about why this has not been disclosed?
2. suggest to the buyer that the stucco seems to have been taken care of and there is no need to do an inspection?
3. recommend an inspection of the stucco?
4. suggest that the seller keep showing the home while the inspection is being set up and performed?
5. tell the buyers to ask for a reduction in price?
Aren’t the issues obvious?
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