Buyers Agent - What is Agency and why should I care?

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Real Estate Agent with RE/MAX Suburban
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Buyers Agent - WHAT IS AGENCY AND WHY SHOULD I CARE??


 
buyers agent,agency in IL,Agency Terms in Illinois - Lyn Sims at RE/MAX Suburban is a 20+ year real estate veteran that can help guide you with representation questions regarding agency in your real estate transaction.  'Who works for who?' is the best way to describe this informative post.  Ask yourself as a buyer:  'Do you want someone working directly for you and your interests?'


Seller's Agent -- When you sign a listing agreement with a real estate broker you are typically signing an agency agreement that makes that broker and all sales associates affiliated with the broker your legal agents. In a designated agency the broker would name one or more sale associates as your legal agent. The seller's agent is a limited as opposed to general agent. In other words, the listing or other agreement with the broker gives the selling agent certain authority to act on your behalf in the marketing and sale of the property. However, the selling agent does not have general powers to act on your behalf such as the power to enter into a binding contract for the sale of your real estate. In the marketing of your real estate, the seller's agent will be acting in the seller's best interest.

Dual Agency -- In this type of situation, both the seller and buyer in a transaction are represented by the same legal agent. Thus, fiduciary duties are owed to both parties. The law has stated that this is not legally possible without the consent of the buyer and seller. Thus, your consent will have to be secured to allow for this type of situation to exist. If a disclosed dual agency actually exists, the role of the sales associate will be somewhat limited and the buyer and seller will act at times on their own behalf in negotiations for the sale or purchase of the property.

Agency -- This is a framework that has developed in the law to allow individuals to act through another person or representative. This particularly occurs in commercial transactions. Examples might include hiring an attorney to represent you in a business transaction, working with a stock broker to purchase stocks or other investments, or working with a real estate broker to buy or sell real estate. Your legal agent may have unlimited or limited powers on your behalf. Your legal agent owes you fiduciary duties such as the duties of loyalty, accounting, and disclosure. In the purchase or sale of real estate you have several different options.

Designated Agency -- This arrangement with a real estate brokerage company will result in one or more sales associates being designated as your legal agent. You can enter into this arrangement either as a seller or buyer. Other sales associates in the real estate brokerage firm may be the legal agents of other buyers and sellers and may be the legal agent of the party who buys your property or from whom you buy property. The only individuals owing you fiduciary duties are those designated as your legal agent and not the real estate brokerage company itself or all other sales associates with that company. A real estate brokerage company will generally offer this service in order to provide representation for both buyers and seller.

Buyer's Agent -- A buyer may ask a real estate brokerage company to act as the buyer's legal agent in the process of purchasing real estate. This can be done by designating one or more sales associates as your legal agent in a written agreement with the broker or by entering into an agency agreement with the real estate broker which would provide that the broker and all sales associates affiliated with the broker would be acting as legal agents of the buyer. The authority of your legal agent to act on your behalf would be limited to those powers granted in the written agreement. In the purchase of real estate the buyer's agent will be acting in the buyer's best interest.
 
Sellers Closing Costs

Buyers Closing Costs 


© National Assn. of Realtors
 
 

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lyn sims remax suburban  Lyn Sims    Schaumburg IL Area    Northwest Chicago Suburbs  ●  (847)230-7324
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Rainmaker
506,080
Ellen Caruso
Daniel Gale Sotheby's International Realty - Glen Head, NY

Lyn, Thanks for the refresher, overtime we read it we learn more.

Mar 21, 2011 09:21 AM #1
Ambassador
1,885,137
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Great description Lyn, also with intermediary there can be with appointments from the Broker or without. Designating who covers the Buy Side, who covers the Sell side or if they are the same person. This dual agency varies around a lot in the states.

Mar 21, 2011 09:30 AM #2
Rainmaker
1,250,578
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Love it .. love it .. love it that you are touching upon educational topics and details, Lyn.  The more the client knows, the less frightened they are.  You improve the chances that they may actually enjoy their buying experience.  I'm applauding ...

Gene

Mar 21, 2011 01:07 PM #3
Rainmaker
918,939
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

Lyn, you explained so well how buyers and sellers are represented.  I explained this yesterday to several clients.    Educating them before the sale is the only way to make them understand.

Mar 21, 2011 03:24 PM #4
Rainmaker
109,362
Rick Hauser
Buyer Broker Chicagoland - CHICAGO IL AND SUBURBS - Hawthorn Woods, IL
ABR, CNC, CNE, GRI, SFR, Exclusive Buyer Agent-Cov

One thing you forgot is - Exclusive Buyer Agents.  Exclusive Buyer Agents and their company never list property for sale - so they don't have the conflicts of interest that designated buyer agents have..... Recommended by Consumer Reports, Money Magazine, Kiplinger's Personal Finance, the WSJ, Money Magazine, CNN Money - as they best way for buyers to buy -- from a specialist - not a generalist.

Apr 19, 2011 03:19 PM #5
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Schaumburg IL Real Estate
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