Buyer Agency - Representation at No Cost

Buying a home is the largest purchase you will probably ever make. If you are not familiar with buyer agency, take a moment to know your options regarding how you are represented when working with a real estate agent. New York State's agency laws are complicated, but basically when an agent is showing you homes, they represent the seller, even if they are not the listing agent. What does that mean to you? That means that the agent owes legal fiduciary responsibilities to the seller. Those responsibilities include

• obedience,
• loyalty,
• disclosure, and
• confidentiality.

For example, if an agent knows that the owners of a home are getting a divorce, they would not divulge that to the buyers they are working with because that would put the seller at a disadvantage. But if the agent is representing the buyer, any information they learn about the seller can be divulged to help the buyer's negotiating position.

Buyer agency representation usually involves a contract between the agent and the buyer client. This is scary to many peoople. But New York State is one of the few states where buyer agency is not the norm. Why do buyers resist an exclusive relationship with an agent? One of the reasons is that they believe they can get a better deal from the listing agent. There are no statistics to prove or disprove this, but working only with listing agents means the buyer does all the work to find homes. This may turn out to be a lot of work, especially today when buyers look at 30 houses or more before buying. An agent working for you is able to preview homes for you, and a buyer's agent legally cannot be prevented from showing an exclusive listing. A buyer's agent can also gain access to unlisted properties.

Another reason buyers don't want to commit to one agent is that they believe there are different listings available to different agents and agencies. Generally this is not true. About 98% of buyers begin their search onlne. If you are using a site like Zillow, Trulia, Realtor.com, etc., remember that the listings you see are being fed into those sites from local multiple listing services (MLS). Brokerages and some individual agents also have feeds from their local MLS on their websites. All of these listings (except for the very rare exclusive office listing) are the same on every website. In other words, any agent can give you information about any listing.

How is a buyer's agent paid? Signing an agency agreement will make you responsible for your agent's commission, but virtually all of the time, the listing agent and the seller have already contracted to pay any agent that brings a buyer out of the proceeds of the sale. So the seller will pay the agent that brought the buyer, whether that agent represents the buyer or not. Hiring an agent to represent you makes sense, because you are paying for it anyway!

For more information about buyer agency, see the Certified Buyer Representative website.

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