KAMLOOPS REAL ESTATE
HOME BUYER'S GUIDE: BUYER AGENCY
In an ideal world, every party involved in a transaction would be fairly represented. When it comes to real estate however, this may not be the case. The seller and buyer, depending upon the type of agreement with the REALTOR®, may not be represented equally. Many people believe that the agent they're speaking with automatically represents them and their interests. Yet without specific disclosures, this is not always true. Agents, as part of their fiduciary duty, must ensure his or her loyalty protects the position of the person they're working with throughout the entire process. If an agent represents the seller, he or she cannot reveal certain things to you as the buyer. Some of these things may be:
- The reason for selling (unless the seller specifically authorizes it)
- Any concessions, in price or otherwise, that the seller may be willing to give up
- Any conversations between the agent and the seller
- Any information that could be detrimental to the seller, or give you the buyer, an advantage. This would include a CMA (Comparable Market Analysis) that could put the seller at a disadvantage
BUT - Buyer's Agency Ensures You Are #1
In recent years changes to the real estate industry have been made to allow for a more equitable arrangement. Buyers are not alone. In fact, with a REALTOR® working on behalf of a buyer as a buyer’s agent, a buyer receives a full range of professional services. A buyer’s agent commits to a home buyer and provides undivided, confidential representation. This REALTOR® has the tools, knowledge, industry connections, negotiating skills and seasoned experience to work for you. Many people lack these essential skills to ensure you do not pay too much for a home.
How Does a Buyer's Agent Help You?
A buyer’s agent must work in a professional, ethical manner, ensuring the purchaser is treated with care, confidentiality, full disclosure and accurate accounting. A buyer's agent will also show the buyer available homes, point out the property's features, provide financing information and submit the offer to purchase. If a Buyer's Agency agreement is struck between you and the agent, it's you, rather than the seller, who has the representation from the agent with whom you are working. Working under the agreements of Buyer Agency, you get the following benefits:
The real estate agent must act in the best interest of the buyer.
The agent must act in accordance with the lawful instructions of the principle (buyer). There will be disclosure of all material factors such as:
- Seller's financial condition
- Property's' true worth
- Strengths and weaknesses of the property
- Commissions split with other brokers
- Legal effects of important contract provisions
- Information about property value trends that may influence your decision about a certain area
- CMA information: a buyer’s agent can develop a Comparable Market Analysis, revealing at what price similar properties in the area have listed for and sold for
- Existence of other offers
- Relationship between agent and other parties
REASONABLE CARE AND SKILL
- Determining and advising the buyer of a reasonable purchase price
- Discovering any facts that would affect the purchase of the home, and advising the buyer
- Ensuring all details and facts of the sale are correct
- Ensuring all money handled between parties is accounted for
The agent must maintain the confidentiality of your information, including financial, legal, personal, or any other information that is collected.
Most importantly, you can ask a buyer's agent for advice and assistance in setting your offer price and structuring other terms of your offer. You'll have peace of mind knowing an advocate is working on your behalf to help you buy at the best possible terms. It is important to understand your options so that you don't unintentionally accept less representation than you want. When you're looking to make the biggest investment of your life, it's not hard to understand why it's important to be represented exclusively!