TYPES OF REAL ESTATE AGENTS
By “type” of agent, we are referring to the various ways real estate agents can serve buyers. If you plan to engage with a real estate agent when you purchase property, it’s critical that you understand which type you are working with. It often comes as a shock to buyers to learn many agents are not allowed to advocate on their behalf nor act in their best interests.
- Seller’s Agents (Never work in the best interest of a buyer.)
Seller’s Agents are legally and morally obligated to protect the best interests of the property seller. Anything you tell a Seller’s Agent, including things that could be used against you during negotiations, will likely be shared with the seller. Seller Agents are easy to identify. They include the on-site representatives in new home communities and agents whose names are on the “for sale” signs in yards. As a general rule, it’s best not to speak with them until you have your own representative. This is especially true in states, where you may not be able to engage a buyer’s agent if you have allowed the seller’s agent to show you the property. In those cases, you are on your own.
- Dual Agents (Neutral)
These are agents that typically start out as Buyers Agents, but then their buyer falls in love with a home they or their company has listed. The moment that happens, they turned into Dual Agents, trying to represent both the buyer and seller in a transaction. They must be honest and ethical, but they are not allowed to advocate for either side because they represent both sides.
- Designated Dual Agents exist in companies that try to keep the two sides separate so they can continue to advocate for both sides. Many individuals inside and outside the industry question whether it is possible for agents who work for the same company and are compensated more generously for a successful closing of an “in-house” property to defend their client’s position with the same enthusiasm as those who do not.
- Transaction Agents (Neutral)
Like a Dual Agents, Transaction Agents work with both the buyer and seller simultaneously. Unlike Dual Agents, who represent both sides, Transaction Agents represent neither side. A Transaction Agent simply guides the transaction through the process without offering either side any advice that could be construed as giving one party an advantage over the other. Most states that have Transaction Agents do not allow Dual Agents. Similarly, most states that allow Dual Agents, do not allow Transaction Agents.
- Buyers Agents (Better)
Buyers Agents have either oral or written agreements declaring they represent the buyer. As the buyer’s representative, they advocate for their client and work to leverage the deal in favor of the buyer, unless the buyer wants to purchase a property listed by that agent’s company. When that happens, the Buyers Agent is forced to become a Dual or Transaction Agent and must stop doing anything that gives the buyer an advantage over the company’s seller client. It’s a small consolation, but the agent’s associate who is representing the listing, must do the same for the seller, too.
- Exclusive Buyers Agents (Best)
Exclusive Buyers Agents (EBAs) always represent buyers, never sellers. They work for
companies that refuse to take listings so they can remain loyal to their buyers at all times. They can show all the available properties on the market and it cost no more to take advantage of their services. EBAs advocate for the buyer and do everything possible at all times to leverage the deal in favor of their client.
For help finding an Exclusive Buyers Agent, or a Buyers Agent where an EBA is not available, CLICK HERE.