When buying or selling real estate, you may find it helpful to have a real estate agent assist you. Real estate agents can provide you with many useful services and work with you in different ways.
In some real estate transactions, the agents work for the seller. In others, the seller and buyer may each have agents. And sometimes, the same agents work for both the buyer and the seller. In order to make the best decisions, it is important for you to know whether an agent is working for you as your agent or simply working with you while acting as an agent of the other party.
This page addresses the various types of working relationships that may be available to you. It should help you decide which relationship you want to have with your real estate agent. It will also give you useful information about the various services real estate agents can provide buyers and sellers, and it will help explain how real estate agents are paid.
If the real estate firm and its agents represent you, they must:
Once you have agreed (either orally or in writing) for the firm and its agents to be your buyer's agent, they may not give any confidential information about you to sellers or their agents without your permission. But until you make this agreement with your buyer's agent, you should avoid telling the agent anything you would not want a seller to know.
To make sure that you and the real estate firm have a clear understanding of what you relationship will be and what the firm will do for you, you may want to have a written agreement. Some firms may be willing to represent and assist you for a time as a buyer's agent without a written agreement. But if you decide to make an offer to purchase a particular property, the agent must obtain a written agency agreement. If you do not sign it, the agent can no longer represent and assist you and is no longer required to keep information about you confidential. Furthermore, if you later purchase the property through another agent with another firm, the agent who first showed you the property may seek compensation from the other firm.
Be sure to read and understand any agency agreement before you sign it.
Whether you have a written or unwritten agreement, a buyer's agent will perform a number of services for you. These may include helping you find a suitable property, arrange financing, and learn more about the property, as well as otherwise promoting your best interests. If you have a written agency agreement, the agent can also help you prepare and submit a written offer to the seller.
A buyer's agent can be compensated in different ways. For example, you can pay the agent out of your own pocket. Or the agent may seek compensation from the seller or listing agent first, but require you to pay if the listing agent refuses. Whatever the case, be sure your compensation arrangement with your buyer's agent is spelled out in a buyer agency agreement before you make an offer to purchase a property, and that you carefully read and understand the compensation provision.
If you are selling real estate, you may want to list your property for sale with a real estate firm. If so, you will sign a listing agreement authorizing the firm and its agents to represent you as your seller's agent in your dealings with buyers. You may also be asked to allow agents from other firms to help find a buyer for your property.
Be sure to read and understand the listing agreement before you sign it.
The listing firm and its agents must:
Once you have signed the listing agreement, the firm and its agents may not give any confidential information about you to prospective buyers or their agents without your permission. But until you sign the listing agreement, you should avoid telling the listing agent anything you would not want a buyer to know.
To help you sell your property, the listing firm and its agents will offer to perform a number of services for you. These may include:
For representing you and helping you sell your property, you will pay the listing firm a sales commission fee. The listing agreement must state the amount or method for determining the commission or fee and whether you will allow the firm to share its commission with agents representing the buyer.
You may permit an agent or firm to represent you and the seller at the same time. This "dual agency relationship" is most likely to happen if you become interested in a property listed with your buyer's agent or the agent's firm. If this occurs and you have not already agreed to a dual agency relationship in your (written or oral) buyer agency agreement, your buyer's agent will ask you to sign a separate agreement or document permitting him or her to act as agent for both you and the seller.
It may be difficult for a dual agent to advance the interests of both the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although the dual agent owes you both the same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party.
If you choose the "dual agency" option, remember that since a dual agent's loyalty is divided between parties with competing interests, it is especially important that you have a clear understanding of what your relationship is with the dual agent and what the agent will be doing for you in the transaction. This can best be accomplished by putting the agreement in writing at the earliest possible time.
Some firms also offer a form of dual agency called "designated agency" where one agent in the firm represents the seller and another agent represents the buyer. This option (when available) may allow each "designated agent" to more fully represent each party.
If the real estate agent or firm that you contact does not offer buyer agency or you do not want them to act as your buyer agent, you can still work with the firm and its agents. However, they will be acting as the seller's agent (or subagent). The agent can still help you find and purchase property and provide many of the same services as a buyer's agent (e.g., the agent must be fair with you and provide you with any "material facts", such as a leaky roof, about properties).
But remember, the agent represents the seller—not you—and therefore must try to obtain for the seller the best possible prices and terms for the seller's property. Furthermore, a seller's agent is required to give the seller any information about you (even personal, financial, or confidential information) that would help the seller in the sale of his or her property. Agents must tell you in writing if they are seller's agents before you say anything that can help the seller. But until you are sure that an agent is not a seller's agent, you should avoid saying anything you do not want a seller to know.
Seller's agents are compensated by the sellers.
For more information about the roles of buyer's and seller's agents, contact:
The North Carolina Real Estate Commission
P.O. Box 17100, Raleigh, NC 27619-7100