Question: I am a 73-year-old widow selling my house and buying a condo. I have always understood that Realtors always represent the seller and not the buyer. I engaged a Realtor and under the multiple listing system, a buyer was brought in through another Realtor. When the buyer submitted his bid, the two Realtors sat here like opposing attorneys, each representing his own client and hammering out a compromise. Is this common, or right? I’d really like to know.
Answer: In the old days, real estate agents always worked for the sellers.
They had a fiduciary responsibility to get the best price possible for the sellers of the homes they were showing. But this created a confusing situation for the homebuyers, who often assumed that the friendly real estate agent who was driving them all over town every weekend really had their best interests at heart. In fact, real estate agents often did feel more loyalty to the buyers than the sellers because they spent most of their time with the buyers.
In 1987, the state Real Estate Commission decided to clear up this confusion by issuing a regulation that required real estate agents to disclose in writing whom they are representing in a transaction. The purchase and sale agreement form used by the Northwest Multiple Listing Service requires the selling agent and the listing agent to check a box to disclose that they are representing the buyer, seller, both or neither.
Now you may be surprised that a real estate agent is legally allowed to represent both the buyer and the seller at the same time, or that the agent can choose to represent neither party. The point of the law is that all parties in a real estate transaction must receive written disclosure so that they know where they stand. As long as all parties agree that the real estate agent can represent both parties, that is perfectly fine. The reason that a real estate agent might choose to represent neither party is so that he or she can act as a neutral broker to help put together a deal between an opposing buyer and seller.
Obviously, in your case, the selling agent represented the buyer and your listing agent represented you in the transaction. Personally, I think that is the best scenario because each party has a real estate professional representing its best interests.
Again, the key is to know who the agent is working for. If you are a homebuyer talking to a listing agent, remember that the agent is working for the seller. Don’t tell the agent anything you wouldn’t want the seller to know, such as, “We’ll start out low, but we’re really willing to pay $10,000 more.” That’s why it’s best to work with a buyer’s agent who will try to get the best price for you, rather than the seller.
When choosing a buyer’s agent, interview a few candidates just as a home seller gets listing presentations from more than one real estate agent.
It’s important that you are comfortable with the agent personally as well as professionally. Some buyer’s agents work on a handshake, while others require you to sign a contract guaranteeing them the exclusive right to represent you in purchase transactions. Either way, once you have found a good buyer’s agent, it’s important to be loyal to that agent. Nothing is more demoralizing for a real estate agent than putting in weeks of time and effort to find the perfect house for a buyer only to have them walk into a Sunday open house and make an offer through the listing agent.
I’m not suggesting that buyers should stick with a poor agent who isn’t providing good service. Just remember that the best agents are true professionals who deserve to be compensated for their expertise. If you happen to stumble into a good deal on your own, that doesn’t negate the amount of time and effort that your agent has expended on your behalf.
Call your agent and have him or her write the offer for you — that way you’ll have an agent representing your best interests in the deal.
Mail your real estate questions to Steve Tytler, The Herald, P.O. Box, Everett, WA 98206, or e-mail him at firstname.lastname@example.org.