There seems to be confusion from some buyers about “Who Represents Who”. Especially in the current Real Estate market, when properties are hard to find and buyers feel frustrated not finding a home to buy or they find one and it is already sold.
One of the things that Reata Realty does 1st, with a buyer customer, is schedule a meeting or what we call a buyers consultation. This is, in the same with any other professional, 1st contact such as a doctor or an attorney. At this face to face meeting we develop a strategy for buying a home in this market by setting realistic expectations, we learn the wants and needs of the buyer, explain buyer representation and address any fears or concerns the buyer may have about the process.
We also make sure the buyer has their financing in place and has a pre-approval letter in hand or has chosen a lender who can actually get the transaction closed. If not then we have proven lenders we work with to recommend to the buyer. This is especially important if the buyer is getting a VA or a FHA loan, which many properties can be eliminated in the search because they don’t meet VA or FHA condition standards. Does that make sense?
Ok, let’s get started. Who represents who? First, let me clear the air. If you are a frustrated buyer and don’t feel the agent you are working with is either communicating with you or is not hustling to find you a property, you need to stop right now and have a face to face with them. Get your strategy planned now!
The Listing Agent: Many frustrated buyers will drive around through the neighborhoods and make sign calls to the listing agent to look at homes. This is fine if you aren’t really “In The Market” yet and you are a casual looker.
The listing agent works for the seller not for you. Their legal obligation is to the seller you have no representation. Its like going to court with no attorney.
The Buyers Agent:
This is an agent you have met with and the agent has fully explained buyers representation to you. Also they will have a Buyers Representation Agreement for you both to sign. This is an agreement which turns you into a client from a customer. The Buyers Representation Agreement, also known as BRA, is the agreement in which the buyer has hired a Realtor to represent them in the procurement and purchase of real estate. Without this agreement, in the eyes of Texas, the Realtor is representing the seller and cannot, legally, give you advice or help you, all they can do is show you property. They are basically a “door unlocker”.
If the Realtor you are working with has not explained this document to you or does not have one then run Forest, run away as fast as you can and find a Realtor who does. Buying a home, for most folks, is the biggest transaction they will do in their life and you want the best and most qualified person you can get to represent you. The Realtors commission is paid from the proceeds of the sale so there is no money from your pocket unless hire an incompetent agent. Then that can cost you thousands of dollars. My advice is hire a Realtor with a proven track record, they are full-time and you and they have a good vibe at your first meeting.
Ask questions, lots of them, you are interviewing them.
Either party can terminate this agreement in writing.
What the heck is this?
This relationship comes about when the listing agent and the buyers agent are with the same brokerage. The Listing Agent still represents the seller and the Buyers Agents represents the buyer but the Brokerage is the Intermediary. As an intermediary, the brokerage stays neutral and is obligated to treat both buyer and seller equally but the agents give representation to each client.
Agent Working Both Sides:
If a single agent is handling both sides of a transaction, remember, either the seller or the buyer has no representation. At Reata Realty, we do not allow this to take place we feel that each client should have representation whether it be seller or buyer. A lot of agents try to do what is know as “Double Dip”. This is to score both sides to get the full 6% commission. This is bad for the seller and the buyer.
I hope this clears up some misinformation out there.