A SELLERS GUIDE AND GLOSSARY OF THE REAL ESTATE AGENCY
Who represents me? And who pays the fee?
We are pleased to have the opportunity to help you market your property. The decision to sell your real estate investment is an important one, and we want to assist you in every way we can. Buyers now have the opportunity to choose to be actively represented by their Realtor®. This document is designed to inform you of the different options available to Buyers and how they may affect you, the Seller.
What is meant by the terms “client” and “customer”?
The Seller in real estate transactions is traditionally a “client” who selects a real estate agent to represent him or her in the sale of a property. A “client” has a contract with a Listing Agent (real estate firm) which binds the agent to work for the client with undivided allegiance. In return, the Seller agrees to pay the agent a commission upon closing of the sale. Up until the mid 1990’s, the Buyer was usually a “customer.” The Realtor® working with a Buyer “customer” in the purchase of your property was your Subagent and will be negotiating such things as price, terms, and special conditions with your best interests in mind.
Now the Buyer also has the option of selecting a Realtor®, known as a “Buyer’s Agent,” to represent him or her as a “client.” This essentially gives the Buyer representation comparable to the Sellers.
What services will my Listing Agent provide?
The Listing Agent’s job is to secure a ready, willing, and able buyer for his or her “client’s” property. To this end your Realtor® will:
- treat you honestly and ethically;
- assist you in pricing your property;
- expose your property to a maximum number of potential Buyers;
- provide helpful information about the property and respond accurately to questions about it;
- disclose all material facts, including defects, of which the Realtor® is aware;
- qualify Buyer prospects and arrange for them to see your property;
- present all offers to you promptly;
- assist you in contract negotiation;
- do everything possible to see that contract contingencies are met and the sale closes.
What services should I expect from a Subagent?
A Subagent working with a Buyer to sell your property can:
- provide the Buyer with information about available properties and sources of financing;
- Show the Buyer available properties and describe their attributes and amenities;
- assist the Buyer in submitting an offer.
Since the Subagent legally owes you, the Seller, undivided loyalty, this means that he or she:
- must negotiate the contract with your best interests in mind;
- must disclose to you whether the Buyer has indicated a willingness to pay more than the offered price or to accept other terms;
- may not disclose to the Buyer, without your permission, any confidential information, such as your reason for selling, your willingness to accept a different price or terms, etc.
How will I know the Buyer’s status?
The Offer to Purchase and Contract clearly states the relationship status between a buyer and his agent and also between a seller and his agent.
How will the Buyer’s choice of “client” status affect me?
If a Buyer’s Agent presents an offer to purchase on your property, the Buyer is the “client” and his or her Realtor is:
- representing the Buyer’s best interests (rather than yours);
- advising (rather than simply informing) the Buyer on location, relative value, etc.;
- acting as the Buyer’s advocate to secure the best possible price and terms;
- keeping confidential financial information that is not material to the transaction, the Buyer’s willingness to negotiate price and terms, and (if requested) the Buyer’s identity.
Agent: A person who represents and acts on behalf of another person in the purchase or sale of real estate.
Listing Agent: A licensed real estate agent who has entered into a contractual agreement with the owner of the property to serve as the agent of the owner for the specific purpose of finding a Buyer for the property.
Selling Agent: The Seller’s Subagent who cooperates with the listing agent in finding a Buyer for the property.
Seller’s Subagent: Any agent who is working with a buyer “customer”, including Selling Agents of the listing firm or those of cooperating firms.
Buyer’s Agent: The selling broker or agent having a contractual agreement with the Buyer to represent him or her in the purchase of a
Dual Agent: An agent or firm who represents both the buyer and the seller in a transaction. Both parties must be informed and of consent to Dual Agency for it to be legal and ethical.
Designated Agent: A Dual agent who represents only the best interests of either the Buyer or the Seller.
Client: A Buyer or a Seller who has entered into a contractual agreement with a real estate agent to represent him or her in the purchase or sale of real estate.
Customer: A Buyer of real estate who has not entered into an Exclusive Buyer Agency Agreement and who is, therefore, representing his or her own best interests.
Realtor®: A real estate professional who is a member of the National Association of Realtors and subscribes to its strict Code of Ethics.