Monday, November 14, 2011

Importance of Agency & Client Representation

Every agency relationship has a principal, an agent and a third party.  In a real estate transaction, the principal (Buyer or Seller), agent (real estate broker) and third party (customer) are bound together in a legal relationship, with all the duties and rights that go with that connection.  Most frequently, the principal is a Seller who employs an agent to find a Buyer for his property.  Sometimes the principal is a Buyer who employs an agent to locate a property. 

Given the premise of agency, it is very important as a Buyer or Seller to identify an agent that you know has your best interests at heart.  Specifically, it is the agent’s fiduciary duty to place your objectives at the forefront and not compromise them in the slightest.  Buying and selling a home can be a very emotional and complex matter, which begs the employment of an agent who embraces confidentiality, loyalty and your utmost trust. 

As a Buyer looking to purchase a property, you need to identify an agent that upholds the following traits:
  • LISTENS and pays careful attention to you and your needs and wants
  • Gives advice and guidance with FACTS
  • Educates you along the home buying process (i.e. prepares comparable market analysis)
  • Has a strong rolodex of resources (i.e. painter, plumber, interior designer, lenders)
  • Strong negotiator & market savvy
  • Is ‘ahead of the curve’ on available property
  • Is respected professionally by other agents in the field
  • Strong problem solver and commitment to you after the deal closes – lifelong Realtor

As a Seller looking to sell your property, you need to identify an agent that upholds the following traits:
  • Cutting edge marketing platform with use of Internet and print mediums
  • Intimate market knowledge of value and future outlook
  • LISTENS to your goals and objectives in selling – caters accordingly
  • Strong negotiator in maximizing sale proceeds
  • Creates an over-arching allure of the property and what is has to offer to prospective buyers

The aforementioned outlines the high-level points to be mindful of when interviewing agents and finding someone who you feel most comfortable with. 

Lastly, there are cases where a real estate agent may represent both the Buyer and Seller, which is called Dual Agency.  In such a case the agent must act with extreme care because the agent owes fiduciary duties to both principals.  The cumbersome nature of working on behalf of both principals can be challenging; however, depending on the overall interest level of the property and market timing, it could work in everyone’s favor – so, such an option is worth investigating.  In the end, identifying an agent that you are comfortable with and listens to your objectives will prove most beneficial to getting the best deal possible.