If you were to ask this question to a real estate professional, they would say "Of course they exist!" But the same question posed to a member of the general public might get a much different response, likely one clouded with uncertainty. Why is it that this little tidbit of information is common knowledge to real estate professionals, yet many home purchasers out there seem baffled by the notion of "Buyer Agency"? Let's unravel this mystery by first sorting through a few common human emotions:
1. Fear of Looking Stupid:
It is human nature to hide the fact that we don't know something that we feel we should. For example, the first time I purchased a vehicle, I really didn't want the salesman to know that I knew nothing about cars! Why? I thought that would make me look stupid and give him an advantage.
2. Fear of Getting Ripped Off:
When I made the above statement, it became apparent that I felt it was a me vs. him thing in the battle of buying a car. I didn't feel that he was working in my best interest and I felt I needed to keep my guard up.
3. Fear of Contracts
Signing a contract is a big deal. Unless you have a law degree or have signed a lot of contracts, it is likely that your heart will pound and you might get a bit sweaty. After you are done, your feet might get cold, you will doubt your decision and you may feel regret. If you don't feel these emotions, even just a little bit, you may not be human. Buying a home is a big deal... you have the right to feel some emotion.
Now that we have addressed some of these emotions, let's get back to why the general public seems to know very little about Buyer Agency? The answer is simple: FEAR. I have always felt that the best way to combat fear is to arm yourself with a whole bunch of knowledge.
Here are 5 things you need to know about Buyer Agency in Alberta.
1. As a buyer, you can choose any REALTOR® you like to represent you in a real estate transaction. You can interview them, ask them a million questions and find one that you feel comfortable with. If you are not sure if they have answered all your questions, keep asking.
2. When you find one you like, you can enter into an Exclusive Buyer Brokerage Agreement. This contract will ensure that the agent you choose is representing your best interests and that they will put your interests above their own at all times. If you choose to work without a Buyer Agency contract, the agent you choose still owes you fiduciary duties that should be explained to you. However, the duties are much more clear and extensive if you work with a Buyer Brokerage Agreement. If you don't understand something in the contract, just ask.
3. You don't pay directly for the services of a Buyer's Agent unless they specify in writing that you are responsible for payment (and this will be covered in section 5 of the Buyer Brokerage Agreement). Nine times out of ten, the seller of the home you purchase will designate a portion of the commissions they are paying to be paid to the Buyer's Agent. If you are unsure about how your agent gets paid, just ask them.
4. If you have hired a Buyer's Agent and they show you one of their own listings and you like it, with informed consent, you will enter into what is called Transaction Brokerage. In this scenario your agent is loyal to and will represent both you, the Buyer, and the Seller. If you choose not to enter into Transaction Brokerage, your agent's loyalty will revert to whomever they first entered into contract with and the other party will be given the opportunity to seek other representation (perhaps from another agent in the company or one from a different company).If you need more clarification on Transaction Brokerage, just ask.
5. If you walk into a home (on Open House for example) and have not chosen a Buyer's Agent to represent you, keep in mind that you are NOT being represented by anyone. The agent in that home is under contract with the seller and has been hired to protect their best interests... not yours! If you are unsure of whom they are representing, just ask.
When it comes down to it, the only thing that is required to remove this shroud of mystery is communication. You must be prepared to ask a lot of questions and you need to find a REALTOR® who is able to answer (or find answers) to all your questions. When you hire a Buyer's Agent, it is not you against them... it is a smart person working with another smart and knowledgeable person to achieve the goal of purchasing a home!
Visit me for more information on Lethbridge Real Estate.
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