Who Puts YOU First in a Real Estate Transaction?
We recommend that, when buying or selling a home, you work with not just a real estate agent but that you choose a Realtor® to represent you – someone who holds a real estate license but who also is a member of the National Association of Realtors® and agrees to uphold NAR’s code of ethics. The NAR does a good job of explaining that here.
Taking that one step further, HouseLogic and Chase partnered in an article called “Who Represents You in a Real Estate Transaction?” earlier this year. In this article, the companies explain who represents whom in a real estate transaction. This information is important, so that you understand who represents YOU when you’re buying or selling a home. Here are the basics, according to HouseLogic and Chase:
Buyer’s agent: An agent who represents a homebuyer in a transaction. The sales commission can be paid by either the home buyer or home seller at closing.
Seller’s agent or listing agent: This person represents only the sellers. The seller pays the seller’s agent’s commission at closing.
Subagent or cooperating agent: If you find a home online and call the agency (e.g., John L. Scott) that is offering the home for sale and an agent shows you the home, that agent represents the seller. If you aren’t sure whom the agent represents, be sure to ask. In this situation, the seller’s agent shares his or her commission with the subagent.
Dual agent: In some states, one agent can represent both the buyer and the seller. There are potential conflicts of interest, so the agent should disclose up front that he or she represents both parties. In the case of a dual agent, the sellers typically pay the commission.
Designated or appointed agency: To avoid a dual agency situation, a broker may designate someone in their agency to represent the buyer and another to represent the seller. The sellers pay the commission, and the designated agents share it.
Nonagency or transaction brokerage: Some states allow a real estate agent to serve as a facilitator of a real estate transaction. Roles and responsibilities vary by state.
Regardless of the relationship you enter into, make sure you understand who an agent is working with before you sign any contracts. If you aren’t sure, please ask. An honest Realtor® will be open and transparent about their relationship and will be happy to explain what their role is and where their loyalties lie.