• Seller Representation
• Exclusive Buyer Representation
• Dual Agency Representation

When homebuyers learned they could have a real estate agent represent their needs in the search for and purchase of a home, real estate regulations began to change. The industry began legislative drives to design legislation which would allow the brokers to provide the service, collect both the listing and selling commissions and avoid liability from law suits. Over the last decade states have been implementing new laws, mostly initiated by the National Association of Realtors and state associations of Realtors. Local newspapers have been eager to print press releases on these legislative changes which always appear to be giving the home buying consumer the type of service they desire. The real truth about these changes is that the intent of the legislation is only to protect the broker's level of liability and their ability to continue to secure both the listing and selling commission.

Most consumers would believe that their state real estate commission would have the responsibility of protecting homebuyers and sellers. While the commissions are charged with this role, a review of who the commissioners are will illustrate why most regulations tend to protect the traditional brokers. Most commissions have a strong majority of commissioners who are traditional brokers appointed to represent the real estate companies and their concerns. A minority of the commissions have lay people who are appointed to represent the consumer and often these commissioners just happen to be attorneys who do legal work for the traditional brokers. With the large traditional brokers having the power to influence legislation and control the commissions, the consumer needs get little priority because consumers generally don't lobby the legislators and are under-represented on the commissions.

The traditional brokers also have the ability to control what the local newspapers publish because they spend millions of dollars annually advertising homes in the newspapers. As a result the consumer's only source of accurate information has been an occasional story aired nationally by the major television networks or magazines. Often the reality of the real estate industry is learned only after a consumer has discovered how they have been taken advantage of by the deceptive practices in the industry. What is really sad is that many homebuyers never realize what is taking place in the process of purchasing a home.

States have disclosure regulations that are supposed to provide the appropriate information to a homebuyer before they provide financial or personal information to an agent. The regulations are not effective because a signature to verify that this information was presented is generally not required until an offer to purchase a property is being completed. In addition, the disclosures that are made normally do not provide the in-depth understanding of the differences in the various types of agency relationships and the implications of those relationships.

To understand the various levels of buyer agency service it is necessary to have knowledge of the more common state laws that regulate agency representation. Homebuyers should take the time to learn all they can about their state regulations because it can have a significant effect on their ability to receive a true buyer agency service.

The agent that has obtained a listing agreement with a seller to market the seller's home will always represent the seller. Other agents associated with the listing agent's broker and all other agents with other brokers will also represent that seller in any transaction unless they have a written buyer agency agreement with the homebuyer.

In most states, agents who represent the seller will be responsible for the following duties:

1. Promote the interest of the seller with the utmost good faith, loyalty, and fidelity.
2. Protect the seller's confidences.
3. Present all offers in a timely fashion.
4. Advise the seller to obtain expert advice.
5. Account for all money and property received.
6. Disclosing to the seller all adverse material facts about the buyer that the agent knows, including their financial ability to pay more for the home and their motivation to buy the home.
7. Disclose to the buyer all adverse material facts actually known by the agent including the following: physical condition of the property, environmental hazards, material defects in the property or in the title to the property.

An exclusive buyer agent is an agent that is associated with a real estate broker that does not list homes. This agent and broker will never in any instance represent the seller or have any of the ethical conflicts that the traditional broker will have in trying to serve both buyers and sellers. The exclusive buyer agent will always owe his/her fiduciary obligation to the buyer.

In most states, the exclusive agent who represents the buyer will be responsible for the follow duties:

1. Promote the interest of the buyer with the utmost good faith, loyalty, and fidelity.
2. Protect the buyer's confidence.
3. Present all offers in a timely manner.
4. Advise the buyer to obtain expert advice.
5. Account for all money and property received.
6. Disclosing to the buyer all adverse material facts the agent knows.

KC Metro Home Finders goes far beyond these state requirements in providing buyer agency service to their clients.

These agents are responsible for the same duties as the exclusive buyer agent. However when these agents show a property listed by their company to their buyer, the agency status will change to either a disclosed dual agent or a designated agent. The disadvantages of being served in these other statuses are:

1. Disclosed dual agents legally represent both the seller and the buyer. Law firms gave up trying to represent both plaintiffs and defendant's years ago because they learned there were too many conflicts. Buyers should know that traditional brokers are most likely to favor the sellers in these situations because most of their service is oriented toward the seller.
2. Their broker appoints designated agents. One agent will represent the buyer and another of the broker's agents will represent the seller. The major drawback with these appointments is that the broker can not legally supervise the work of the agents.
3. Transaction brokers are a classification that was legislated in some states to give the brokers a legal right to supervise their designated agents work. The brokers in these incidences have no agency requirement to either the buyer or the seller. This limits the brokers liability to the buyer and gives the buyer less protection than they can receive through the service of an exclusive buyer agent/broker.