Clients often ask me to explain the difference between a seller’s agent (listing broker) and a buyer’s agent.
Some buyers even indicate that they might prefer to negotiate directly with the seller and listing broker. And forgo the buyer’s agent altogether.
Let me be clear: This is a very bad idea.
There’s a huge difference between a seller’s agent and a buyer’s agent. Under only very rare (and legally disclosed) circumstances should a single agent represent both sides of a transaction
The listing broker represents the seller and has a legal obligation to get the best terms and price possible for the seller.
Now here’s where it gets confusing for buyers. In the state of Oregon, a home buyer can go directly to the listing broker to purchase a seller’s home. Upon legally required disclosure, the listing broker becomes a “Disclosed Limited Agent,” which indicates that she represents both the buyer and the seller. Whoa, wait a minute!
What Does This Mean To The Buyer And The Seller?
It means that they share one agent who represents two very different (often conflicting) interests. The agent becomes an intermediary between the two interests. To be completely integrous and within legal bounds, the broker must walk a fine line between the two clients and insure that she doesn’t disclose one client’s information to the other client.
So maybe you’re thinking, “That’s not so bad if I can save on the purchase price.” This assumption is incorrect.
Here’s How It Works
The listing broker and seller set a commission structure before listing the home. The seller (NOT THE BUYER) pays the commission. Therefore, when a listing broker becomes a disclosed limited agent, she is entitled to the full commission.
So not only does the buyer not get a kick back on the commission, they also have no dedicated representation. Sounds problematic, right?
It is, and that’s why many experienced, reputable listing brokers refuse to work as a disclosed limited agent. It does both clients a disservice.
Also keep in mind that after a buyer gets through the price negotiation, the home inspection kicks in. What if there’s an issue with the home that needs to be addressed on the repair addendum? This is a common occurrence. Your disclosed limited agent must now negotiate on your behalf with the seller (her original single client). An unavoidable conflict of interest arises. So seriously, who’s representing YOU?
What Are Those Agent Roles Again?
Let’s recap. shall we? There are three roles, as follows:
- Seller’s Agent Represents the seller exclusively.
- Buyer’s Agent Represents the buyer exclusively.
- Disclosed Limited Agent Represents both buyer and seller non-exclusively in the same transaction.
And again, we don’t recommend buying a home without exclusive, qualified representation. In fact, we recommend an Accredited Buyers Representative.
What Is An Accredited Buyers Representative?
The Accredited Buyers Representative (ABR®) designation is the benchmark of excellence in buyer representation. This coveted, earned designation demonstrates to peers and consumers a commitment to providing outstanding service for real estate buyers. With an Accredited Buyer’s Representative, you have a partner you can trust, a partner whose sole commitment is to you and your home buying goals.
As an Accredited Buyers Representative, I advocate strongly and consistently for my clients. I work with clients from beginning to end to meet their home buying goals–through financing, searching, touring, negotiation, inspections, appraisal, and escrow.
If you’re looking for a top notch buyer’s broker, check out what my clients are saying about my work on their behalf.
And then give me a call at 503-936-3373. I’d love to work with you.
Copyright 2017 Rachel E. Bradley. All rights reserved.