Buyer Agency
In New York State, buyers should realize that by law, all agents initially represent
the seller of ANY property, even if it is listed by another company or is for sale
by the owner.
What this means is that as an unrepresented buyer, anything you say to that agent,
regardless of the company they work for, can be used against you in negotiations.
The agent has a fiduciary obligation to the seller alone and is under no obligation
whatsoever to a buyer for accountability or to keep things a buyer reveals in confidence.
Until the 1990’s almost all agents represented the sellers exclusively and the old
idiom, “Let the buyer beware” was taken to heart. Unfortunately, many buyers thought
their best interests were represented by the agent they were working with, who in
fact, was representing the seller.
Then in the early 1990’s, many states began passing laws that created Buyer’s Agency.
Up to this point (and even today) an agent working with a buyer without a properly
completed Buyer Agency Disclosure is legally allowed to provide only the following:
- Arrange property showings
- Assist with financing
- Provide information available in the public domain
- Explain forms
- Monitor closing activities
However, when a buyer elects to have the agent work as their Buyer’s Agent, and
has indicated this on the Agency Disclosure, it affords the buyer the same fiduciary
responsibility that was formerly afforded to the seller. In this case, a Buyer’s
Agent can:
- Provide advice & counsel
- Keep your information and intent confidential
- Negotiate price and terms that are favorable to the buyer exclusively
- Provide you with facts that might influence you NOT to buy a property
- Objectively evaluate properties
- Write an offer that is to the buyer’s advantage
- Match your needs relative to the entire market, listed and unlisted properties alike
- Offers total commitment to the buyer
In addition to the Agency Disclosure, most professional full time agents will not
entertain working with a buyer unless they have what is called an “Exclusive Buyer
Agency Agreement” which is in essence, a contract that clearly states the responsibilities
of both the agent and buyer. For one thing, it separates the casual, uncommitted
buyer from those who are more serious. In this way, the agent can justify investing
in the relationship without the distraction of a casual, uncommitted customer -
buyer. More importantly, it represents a commitment between the agent and the buyer
that supports a higher level of trust and cooperation where the buyer can receive
a higher level of service and additional benefits that may be unique to that agent
or his/her team or company.
©
David Phaff and Associates at Realty USA®