When you do a real estate transaction, it is very important to know who is representing you. You may be surprised that you do not have representation. If you are using the same agent as the other party to the real estate transaction, that agent is not representing you. The title company does not represent you. Their attorney does not represent you. If you are a buyer, you need your own Realtor to represent you in the transaction. If you are a seller, you will want your agent to represent you in the transaction. If you want an attorney to review your contract and title commitment, hire your own attorney. If you are not sure if you have representation, ask! Real Estate transactions can be complicated and you will need someone looking out for your best interest. How can you know for sure that you have representation? If you have representation you have something in writing stating you have representation.
Be aware then when you contact a real estate agent about a home for sale, you are speaking to someone working for the seller. If that is the agent that has the home listed, they are the seller’s agent. This agent likely has signed a written agreement (usually a listing agreement) to represent the home owner and they have a fiduciary responsibility and must look out for the seller’s best interest.
If you are not sure if you have representation – ask. If you do not have representation or something in writing outlining your representation (like a buyer’s representation agreement) find your own agent to represent you in the transaction. Then you have a loyal representative looking our for your best interest. Realtors abide by a strict code of ethics. They can explain their duties to you and outline the relationship in the buyer’s representation agreement.
If you are a buyer and you don’t have representation and you call the seller’s listing agent to show you a property, then whatever you tell them will be relayed to the seller. They have a duty to the seller and are obligated to tell their client anything you tell them that could help the seller in the deal. So for example, if you tell the seller’s agent you need to find a house quickly because you are getting a divorce and have been living temporarily with friends, then that agent must relay that to the seller. That could weaken your negotiating power in the transaction.
Whenever you first meet with an agent (or have your first substantive dialog) you should be presented with a form called the Information About Brokerage Services(IABS). The IABS explains the relationships between the buyers, sellers and real estate agents and brokers. You will want to get your own representative whenever you are purchasing a real estate property. If you are a buyer, chances are, having your own Realtor won’t cost you a penny. The seller usually pays all of the real estate commission, even if you have your own representation. So since the seller is paying for you to have representation, why wouldn’t you get it? You want someone working for you who can look out for your best interest.
If you would like help purchasing a property or want to learn more about Texas Realtor representation, please call RREA at 281.288.3500.