The Role of the Buyer's Agent in a Real Estate Transaction
In most transactions, there is usually a listing agent and a selling agent. The selling agent is sometimes referred to as the buyer's agent, because he works on the buyer's behalf while the seller’s agent works on behalf of the seller to market the property and to obtain the best price possible. The Buyer’s agent’s role is fairly straightforward. He or she acts on behalf of the Buyer to locate and negotiate the purchase of property suitable to the Buyer’s needs.
In some transactions, however, the line between Seller’s agents and Buyer’s agent is blurred. This happens when the seller’s agent and the buyer’s agent are the same person. This is known as a dual agency relationship. This arrangement can be convenient as buyer and seller only have to communicate to one person. There are, however, some pitfalls to this arrangement as the agent will have divided loyalties to both buyer and seller and will know what the seller’s and buyer’s best offers really are. There is a danger that the agent will use this knowledge to obtain a better price for the seller and thereby make more money off of a commission. A buyer, therefore, should carefully consider whether entering into a dual agency agreement is in his or her best interests.
The other thing to consider when making the decision of whether to employ a Buyer’s agent is that the Buyer’s agent is always paid by the Seller at closing and, therefore, does not cost a Buyer anything.
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