Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective buyer or a tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly.
Buyer’s Agency: The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.
If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.
In Texas, when you first meet a real estate licensee and after your first subsequent conversation, your real estate agent should provide you with an “Information About Brokerage Services”. Pay special attention to the paragraph that starts with SUBAGENT. This section says: “AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.”
Please understand, that when you work with an agent without a buyers representation agreement, the agent showing you properties owes their loyalty to the seller. It is only after a consumer enters into a buyer’s representation agreement with an agent is that buyer protected.
Here is the difference between being represented and not being represented:
After you sign a buyers representation agreement, you are represented and receive (by law):
- Honesty
- Fairness
- Accountability
- Reasonable Care
- Disclosure of Material Facts
- Undivided Loyalty
- Confidentiality
- Full Disclosure
- Objective Evaluation
- Price Counseling
- Help Negotiating
- Truly, the agent works for you
Without you signing a buyers representation agreement, you are represented and receive (by law):
- Honesty
- Fairness
- Accountability
- Reasonable Care
- Disclosure of Material Facts
Can you say DUH!!!! You need to be represented before you disclose anything to an agent and I mean ANYTHING!
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