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The Typical Residential Real Estate Sales Transaction: An Overview for Buyers and
Sellers |
NOTE: This article is intended
to be a brief summary of law only, parts of which may or MAY NOT be applicable to your situation and/or your local
jurisdiction(s). Any information you
glean from this article DOES NOT
constitute legal advice and should be supplemented with the advice of an attorney
licensed to practice law in your locality. |
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2.) Hiring a Real Estate
Agent/Broker. Once the decision has been made to sell or buy a
home, in addition to hiring an attorney, a prospective Seller or Buyer of
real property will typically hire a real estate agent or broker. [But some
choose not to; see For Sale by Owner.].
At one time, it was difficult to sort out who was brokering, who was acting
as an agent, etc. In the past few years, many states have enacted laws in an
attempt to establish uniform rules governing real estate agents/brokers.
Under such laws, the following is typically true: a. Real Estate Seller’s Agent. Anyone holding them self out to be a Seller’s
Agent is deemed to work as a fiduciary solely for the Seller in a
given real estate transaction. In other words, a Seller’s agent has a duty of
loyalty to the Seller and is therefore tasked with obtaining the highest
possible price and best possible terms for the Seller. Thus, if you are a
Seller desiring to have help in finding a buyer at the highest possible price
for your home, you will typically want to hire a Seller’s Agent. b. Real Estate Buyer’s Agent. Conversely, a real estate Buyer’s Agent works
exclusively on behalf of, and holds him/her self out to represent only the
interests of, a Buyer.? A real estate Buyer’s Agent is a fiduciary
of the Buyer, and is thus tasked with finding a Buyer the best possible property
in the best possible location for the lowest possible price. If you are a
prospective real estate Buyer looking for someone to actively advocate on
your behalf in finding and negotiating the purchase of a new home, you will
want to make sure that you hire a Buyer’s Agent, not a Real Estate Seller’s Agent (see above) or a Real Estate
Broker (see
below), either
of which at the least may not fully
represent your interests and at the worst may really be an agent of the
Seller! c. Real Estate Broker. Ideally, someone
purporting to be a Real Estate Broker will work on
behalf of both parties to a real estate transaction, acting as a
go-between and owing a duty of care to both the Seller and the Buyer. In
other words, if one of the parties provides confidential information to the
Broker (e.g., max./min. price) the Broker must
not disclose that information to the other party. Furthermore, if
claiming to represent both parties, a Broker must not do anything that
undermines the interests of either party, all the while conducting
himself/herself in a way that benefits both parties. As you might imagine,
this is a very tall order to fill, so care should be given to make sure that
a prospective Broker has the independence and objectivity necessary to truly
act on behalf of both parties. As previously mentioned, many states have passed
laws requiring real estate offices to provide full disclosure regarding the
nature of their representation. However, if in doubt, an age-old rule of
thumb should be applied: follow the money. For example, if
someone claiming to be a broker wants to sell you a particular piece of real estate, try to determine what is his/her interest in the
transaction. If he/she will only be showing you one particular property and
will be taking a percentage of the sale price for that property, beware!
That broker’s interests are firmly in line with the Seller’s, not
yours.
Regardless of the title used by a real estate broker with these loyalties and
self interests, he/she is, in effect if not officially, an agent of the
Seller. |
See Also: Doctrine of Equitable Jump Preliminary Matters v v Hiring a Real Estate Agent/Broker Real Estate Seller’s Agent Real Estate Buyer’s Agent v Negotiating the v Pre-Closing Matters v The Closing Affidavit of
Title
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If you would like further information
about this topic, or would like to request attorney services for the writing,
negotiation or closing of a real estate contract, click here to
contact us today. |
Go to: page 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 of this document |
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* Licensed to practice law in
© Roger Galer, 2004
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