Why is that? Because they are paid by the seller and cost you nothing! That's right, it's like getting free legal counsel. The best part? When you have a Buyer-Broker Agreement contract, they are obligated by law to protect your financial interests.
In California, it's legal in real estate for an agent to practice Dual Agency. That means that someone who lists a property for sale can also assist a buyer to purchase that property. Many buyers assume that's the best way to purchase, thinking they will get a better deal by going directly to the person selling the property.
Here's the rub. With whom does that agent have a contract with? The seller. Who is his client? The seller. He can assist the buyer, but he cannot represent the buyer. In other words, the seller is his client and the buyer is a customer. Big difference. He is obligated by contract to get the most for the seller. Many buyers assume that if they use an agent other then the listing agent, they are being "represented" in a client relationship. Wrong! Without an agency agreement, the buyer is considered to be a customer!
According to California real estate law, the agent is assisting the buyer and is technically called a sub-agent for the seller. Yes, that's right! His duty is to help the seller's agent sell the property, not help the buyer get the best deal.
So what should a buyer do to make sure he is represented properly?
Find a buyer's agent and put that agent under contract with a Buyer-Broker Agreement. Explain what you expect that agent to do and hold them accountable to protect your fiduciary interests. Now you are in a client relationship by contract, not just implied.
You should ask the agent how they will be compensated if you should buy a property. They will point out in the contract that they will be compensated by the selling agent through the Multiple Listing Service. Unless you plan on purchasing a "For-Sale-By-Owner", it which case the agent will likely try to negotiate a fair commission from the seller. If the seller refuses, the buyer may have to compensate the agent in that instance. That's ok, because now the shoe is on the other foot. In this instance, the buyer is the client and the seller is the customer. The agent will be working for the buyer's best interest. He will likely have to do much of the paperwork for the seller and make sure the sale is done legally and properly according to real estate law. Because he is under contract to the buyer, he will be obligated to make sure the transaction favors the buyer and not the other way around.
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