Not knowing exactly who the “agent” involved in a real estate transaction actually represents is one of the biggest mistakes that some buyers make.

Normally, when a home is listed for sale, the seller agrees to “co-operate” with any real estate professional who brings a buyer, negotiates an agreed upon sale, and closes the transaction.  As a result, the cooperating agent is paid from the proceeds of the sale.

In other words, a “buyer’s agent” is paid to help find a buyer for the property.

On the other hand, the listing agent works on behalf of the seller. Simple enough.

But, here is where it can get tricky for some people . . .

All of the other 10,000 agents currently working in the Austin area could also be working for the seller as “sub-agents.”  For instance, if you were to email a Realtor out of the blue and ask for information for a specific property that you found online, technically, he or she could provide that information to you but only on behalf of the seller.

Until you have a representation agreement with a buyer’s agent, legally their duty is to protect the seller and get him/her the highest price possible with the best terms.  This is the case even if that Realtor hasn’t actually listed the house with his/her company.

The Realtor Code of Ethics states that all Realtors must disclose whom they represent as soon as possible.  Unfortunately, many never do.

What happens then? You find a house, ask an agent to help you make an offer without having a buyer’s representation agreement in place, without knowing who that agent really represents and later you find out he or she represents the seller and you haven’t received the advice, information and assistance that you deserve to make a strong, educated decision.

So how do you get someone working FOR YOU?

A signed Buyer Representation Agreement is the only way to ensure you are protected. The agreement is done in writing just like any other real estate agreement. The best part about it for you, the buyer, is that you get a top notch, first class consultant (like myself) to negotiate and coordinate the transaction on your behalf and it doesn’t cost you a dime.

Simply put, the Buyer’s Representation Agreement says that even though the seller is paying me as the Buyer’s Representative, my legal duty is to ensure YOUR interests are protected as a buyer. It gives me permission to work for you only and not the seller.

There’s more . . .under the Buyer Representation Agreement, the duty of your “buyer’s agent” is to keep your information confidential, and make sure that they best price and terms are negotiated for your benefit.  He or she will tell you the truth about market value, because he or she is under contractual obligation to look after your interests.

On the other hand, if there is no signed representation agreement in place, you can assume that your agent automatically works for the seller.  He or she might show you only properties and prices that would validate the seller’s asking price.  His or her  job is to protect the seller instead of you.

Just to reiterate, the legal obligation of someone who is not your Buyer Representative is to represent the Seller of any property.  When you go to an open house or do anything without a Buyer Representation agreement in place, you are on your own.  Or worse, you might end up working with someone who is not even looking out for you.

NOT signing a Buyer Representation Agreement could cost you thousands or tens of thousands of dollars. The purpose of the agreement is so that there is an understanding, consent and clear boundaries about who’s really working for whom.

The agreement can last anywhere from days to years.  It IS a commitment in writing so make sure that you ask your representative if he or she offers an Easy Exit Guarantee, in case you are not happy, just like this one.

Not all Agents are Realtors® . . .
Not all real estate practitioners are Realtors®.  The term Realtor is a registered trademark that identifies a real estate professional who is a member of the Nation Association of Realtors® and subscribes to its strict Code of Ethics.  Here are nine reasons why it pays to work with a Realtor®.

Download this report in pdf: Buyer’s Representation is in your Best Interest.

Visit the Buyer’s Resource Center for more Free Reports about Home Buying.