FAQ for Buyer, Seller and Dual Agency

When you're looking to buy a new home you usually find a real estate agent to help in the search.  Do you know about buyer and seller agency?  Sometimes it is implied and at others it is explicit.  Agency has to do with the fiduciary responsibility the agent has to someone else.  In seller agency the responsibility is to the seller and in buyer agency it is to the buyer.  In short, a seller agent is an advocate for the seller and a buyer agent is an advocate for the buyer.

In Nebraska, all agency used to be seller agency.  All agents were sub-agents to the seller.  This caused a lot of confusion and anger because buyers thought the real estate agent they contacted had their best interests at heart.  That changed later when the unicameral passed the legislation to create buyer agency.

Now in Nebraska, the agent can have seller agency, buyer agency or be a dual agent.  Dual agents work for both the buyer and seller and have to walk a very fine line. (There are other types of agency but these are the three important ones.)

What is buyer representation?

Working with a buyer's agent means you have someone who pledges to you his loyalty, confidentiality, obedience, accountability, reasonable care and diligence.  In other words, he is putting your interests above his own.  If he knows something about the property he needs to tell you and he can guide you in negotiations.

Can I just call the agent whose name is on the sign in front of the house?

The agent who is listing the house is a seller's agent.  That agent has already pledged to the seller to do his best for the seller.  If you agree to work with the seller's agent he then becomes a dual agent.  In Nebraska you will all have to sign a dual agency agreement -- buyer, seller and agent.  The agent will help you as much as possible without violating any previous commitment to the seller.  In other words, he will work for you but is limited compared to a buyer's agent. Why would you want to limit yourself?

Will I get a better deal if I go to the listing agent?

The seller's agent has already pledged fiduciary responsibility to the seller.  He will not counsel the seller to take a lower offer so that you can benefit.  If you have signed a dual agency agreement with the agent, he cannot be advising you or the seller one way or another on price.  At this point, only you and the seller are in charge of the sale.  The agent is just acting as a courier.

Can you show me properties that aren't your listings?

Absolutely!  I can show you listings in the MLS and For Sale by Owner (FSBO).  I can even show you mobile home trailers!  If there is a FSBO you want to see, most of them will agree to pay a buyer's agent if the agent can bring someone qualified.  Do your searching online if you want, then come to us with properties you want to see.  Or give us a call and we will sit down in the office and sift through the MLS together.

How much does buyer representation cost?

Buyer representation normally costs you nothing.  The commission is paid for out of the proceeds of the sale.  The buyer's representation agreement does state you will pay the buyer's commission if the seller refuses but we know ahead of time if that is the case.  You are not going to get caught at closing with a bill for a commission.

Do I have to sign anything?

Yes, our agreement is called Disclosure of Brokerage Relationships in Real Estate Transactions and it outlines what each of our responsibilities are. We need to give this to you at our first substantial meeting.  we will go over each section of the agreement so that you understand it, but essentially it says that for a period of time we will work together in an agency relationship and that we will represent you in the purchase of your new home or land.

How long do I have to sign the agreement for?

The period of time that we are under agreement is negotiable.  It is at-will, meaning you can walk away from us whenever you like. It is over once closing happens.

What else do I need to know about buyer representation?

Buyer's agency means we will do our best to find you a home and this extends all the way through the process.  We will help you look at houses; give you our best opinion on pricing and offers; negotiate inspections and the repair of items found; help with transferring utilities and such; work with the lender and make sure closing happens; and more.  We discuss this all up front so you are comfortable with what is going to happen through the process.

After reading about agency, why wouldn't you want a full-time buyer's agent representing your best interests?  Dual agents will help you but will not advocate for you.  If you want the best representation possible for pricing, negotiations and everything that goes into buying a home, you need a buyer's agent.