South Orange County Real Estate
what is a buyer’s agent and why do you need one
A buyer’s agent is a single agency whereby the real estate agent represents the buyer in the real estate transaction. I know everybody is saying Sherry we all know that but what exactly are the duties of a buyer’s agent and why should we have one?
A real estate agent who becomes an agent of a buyer is held by law to the following fiduciary duties which include the following:
- Loyalty - The buyer’s agent acts at all times solely in the best interest of their buyer and not what’s best for the brokerage or agent
- Obedience -The agent must obey all lawful instruction of the Buyer, is not obligated to obey instructions from the Seller.
- Disclosure - The agent must disclose to the buyer all known relevant and material information that pertains to the scope of the agency. Disclose any material facts affecting the value or desirability of the property. Supply the buyer with any information they find out about the seller’s motivation or reason for selling.
- Confidentiality – The agent must keep all information about the buyer confidential, including the buyer’s ability or willingness to pay more for the property than they are offering as well as the buyer’s motivation for buying.
- Reasonable Care and Diligence – The agent is obligated to use reasonable care and diligence when assisting the buyer. It’s expected that the buyer’s agent have knowledge and information to assist their buyer greater than the average person as they are the licensed professional agent.
- Accounting – The agent must account to the buyer for any money or documents entrusted to them.
Okay so now to answer my original question should you or should you not have a buyer’s agent? The simple answer is yes. After reading the fiduciary duties you can see that it would not in your best interest as a buyer to deal directly with the listing agent. Because just as the buyer’s agent owes the fiduciary duties to you as the buyer so the listing agent’s primary fiduciary duty is to the seller. It is his/her job to make sure that the seller gets the best possible price and terms for the sale of their home. Just as it is the buyer’s agent’s job to try to find out as much as he/she can about the reason why they are selling (divorce, job loss, transfer etc.) so he/she can help negotiate the best price and terms for their buyer.
I have been both buyer and seller’s agents exclusively as well as I have represented both seller and buyer which is called dual agency and I have to say it’s the hardest thing to do to maintain the fiduciary duties to both parties. With that said remember if you were sued by someone you would both not hire the same attorney to represent you as it’s impossible for them to represent you equally. So should it be in a real estate transaction. It’s in your best interest to have your own representation. Remember there is no cost to have a buyer’s agent so the service is invaluable to you.