Purchasing a unit among homes for sale listings is not just a big financial decision, but one that can take its toll on one’s emotions. These are the very reasons why it’s crucial for you to choose the right agent to help you find a home and a financial planner to keep your on track with your home buying budget. For a home buyer or seller to assume that all real estate agents are the same is a mistake. Recognizing the different types of agents is the key to zeroing in on the one who you will work well with throughout the whole experience.
1. Traditional agents – The usual property transactions occur between two agents or brokers. The listing agent that works for the seller goes and supplies details about the property their client is selling. The seller agent (also known as the cooperating agent or the subagent) is the one that finds the right buyer for the seller. When the transaction’s over, the seller pays the commission, which is split between the two agents. In some cases (if the real estate company allows), both jobs are done solely by the listing agent.
What’s essential to remember is that no matter who you work directly with (the listing agent or the seller agent), the seller is the one who takes on the fiduciary obligation. They are supposed to answer all your questions honestly, but should you divulge any information that may be of importance to the seller, the agent will have to pass it on to the seller. If, for instance, you were to let slip that you’d be willing to pay more than what you’re currently offering, they need to tell that to the seller. To keep things clear, don’t forget to ask for a written disclosure of who the agent is working for and whether or not they will keep your communication confidential.
2. Buyer agent – Although the recent years saw the appearance of more and more buyer agents, they still only make up a small percentage of real estate agents in general. This kind of agent, of course, works for the buyer. Just as the listing agent divulges information given by the buyer to the seller, the buyer agent is required to tell the buyer if the seller mentions reveals that they are willing to sell for less than their asking price. The buyer is also obligated to negotiate in behalf of the buyer, not the seller.
There are some who might think that since the buyer agent gets part of the listing agent’s commission, the buyer agent may not be acting solely with the buyer’s interests at heart. It should be understood that in most states, the contract is what determines the agency relationship, not by the party who pays the commission.
There are times when the buyer pays the buyer agent a retainer fee that is either credited to the final commission or given back if the buyer decides not to purchase, but this fee can be negotiated or waived altogether. This is actually an advantage that buyer agents have over listing agents. Since they’re working for the buyer, they can search more thoroughly, even look into unlisted properties like “for sale by owner” or FSBO homes, or brand new homes. In situations like this, you will need to cough up money to cover commission or a certain agreed-upon fee, but it would be worth the money.
3. Transaction agent – One of the things that sellers or buyers don’t realize when working with an agent is that they can be held responsible for their agent’s actions. In situations where the agent misrepresents a property for sale or does not disclose material information, the seller or buyer may be liable. Hiring a transaction agent will keep this from happening: they are in charge of closing the deal without costing either party fiduciary obligation.
4. Dual agent – This is the most seldom used method because it means that the agent represents both the buyer and the seller. This is confusing because it is a clear conflict of interest since you never really know if they are working more in favor of if they are doing so.
No matter what kind of agent you eventually go for, make sure that all legal obligations are in writing. To gain the upper hand, you might want to work with a financial planner who solely works for you. You want to make sure that all tax, budget, insurance and investment implications are ironed out before you agree to a deal.
Want to know more about our latest projects? You may visit our Lancaster New City page to learn what make this community one of the best investment options in the Philippines.