Agency is by far the most important concept that you must understand. Let me explain it with a story.
Jill Buyer's dad has inherited some money. Jill's dad Peter is a take charge type guy. He likes to look at homes on Sunday afternoon. Peter Jill's Dad, has a good friend from Canada that know all about real estate.
On an unusually warm and bright Sunday afternoon they drive by a very appealing property. It is the ideal location for the children's school and has great curb appeal. They stop, go into the home and are met by the real estate agent. The agent asks Jill and Joe if they have been working with an agent. "No, we are just looking," they respond.
You guessed it! Jill and Joe fell in love with the house and Jill's dad contacted the listing agent and began negotiating with her for the home. As soon as this happens the agent, let's call her Nancy Nice, becomes a dual agent. Nancy Nice is required by the agency law in the state of Kentucky to give all of her allegiance to the seller. She owes her first allegiance to the seller. She is also required to explain the law to both the seller and the buyer and ask permission to be a "limited duel agent." Furthermore she is also required to give the clients in the state of Kentucky a pamphlet explaining agency.
Jill, Joe and Peter would be much wiser to get their own realtor to represent them as a buyer's agent. They would then not put the listing agent in the dual role. Think about it! Who is going to treat your money like it is their own? Who is going do everything to save and make you money? The listing agent cannot serve you wholeheartedly because she has a long term relationship with the seller.
The wise buyer will always enlist the service of a buyer's agent before embarking on the buying journey?
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