Buyer's Agent or Seller's Agent ... which one are you really working with?
Buyer's Agent − An agent who's goal is to negotiate the lowest price and best terms for the buyer.
Seller's Agent or Listing Agent − An agent who's goal is to negotiate the highest price and best terms for the seller.
Sounds simple, but read this real-life real estate transaction. Only the names were changed.
John Wantabuy would like to see inside a home he has driven by. As you can see from the yard sign, Iva Gothouse is the “Listing Agent”. Obviously, as a buyer, John doesn't want to talk to an agent (Iva) hired by the seller, so he calls Judy Showhomes, an agent with ABC Realty.
Judy shows John the home. John likes the home and has Judy to write up and negotiate his offer. Since Judy works for another company, did she ethically and legally represent John, the seller, or no one? If you think Judy worked as John's “Buyer's Agent,” and represented John's best interest, you're wrong!
The way the majority of real estate transactions work:
1) The seller signs a Listing Agreement with the Listing Broker. The seller agrees to pay a commission to the Listing Broker when the property is sold. The Listing Broker, along with all of his agents, agree to represent the seller in the transaction.
2) The Listing Agreement contains a “Co-operative Brokers” clause, which enables the Listing Broker to hire (by splitting the commission paid by the seller) other brokers to help sale the property.
3) In return for the commission split, the Co-operative Brokers, along with all of their agents, agree to represent the seller as “Seller's Agents,” also. Judy Showhomes was a “Seller's Agent” by way of the Co-operative Brokers clause.
Georgia law prohibits any Real Estate Broker or Broker's Agents from representing a Home Buyer as a client without first entering into a written agreement with the Buyer. This is known as an Exclusive Buyer's Brokerage Agreement. If John had signed an Exclusive Buyers Brokerage Agreement, Judy would have been working exclusively as John's Buyer's Agent; and, because of the Co-operative Brokers clause, the commission (paid by the seller) would have paid both the “Listing/Seller's Agent” and the “Buyer's Agent” fee or commission.
This is how Lynn and I can offer you our Home Buyer Services 100% free of charge.
With an Exclusive Buyers Brokerage Agreement Lynn and I ethically and legally represent you, and the seller pays our fee!