A “buyer’s agent” is exactly what it sounds like-a real estate agent working on behalf of a buyer. This includes not only working with a buyer to locate a property, but also negotiating the contract, resolving contingencies and helping the buyer prepare for settlement-all with the buyer’s best interest at heart.
How It Used to Be . . . .
A few decades ago, buyer’s agents did not really exist. Most real estate agents represented the seller even if they worked with the buyer. This meant that even if a buyer was using a real estate agent to look for properties and help write a contract, that real estate agent was technically representing the seller.
These days, that arrangement seems unfair and odd. However, if you ask agents who worked in that environment it was the norm.
But Then . . .
In the 1990s, a movement began that called for buyers to have independent representation in real estate transactions. Although it seems strange now, this concept really turned the real estate industry upside down. State laws were passed that required disclosure of the relationship between buyers and real estate agents so it was clear who represented whom.
Virginia’s most recent revision of its disclosure law was in 2012. The law now requires that before an agent can perform any “licensed activity” on behalf of a buyer, the agent and buyer must have a written agreement to work together (“Buyer Broker Agreement”). “Licensed activities” include showing property, giving an opinion or advice about a property and negotiating a contract—basically all of the activities you would expect your agent to do for you.
What This Means to You …
Because we want to represent our clients to the fullest, we ask that each buyer sign a Buyer Broker Agreement. Without it, we cannot do all of things you would expect us to do including show property, give you advice regarding the terms of an offer or negotiate an offer on your behalf. For us, the buyer broker concept makes sense. By signing a buyer broker agreement, you are commiting to work with us and in return we commit to work for you.
Who are These Other People?
With many professionals involved in any given real estate transaction, sometimes it can be difficult to ascertain just whom each of these people work for. Below is a brief explanation.
Listing Broker/Agent
Represents the seller’s best interests throughout the sale and is paid pursuant to the listing agreement between the seller and the listing brokerage.
Buyer’s Broker/Agent
Represents the buyer’s best interests throughout the sale and is paid pursuant to the listing agreement between the seller and the listing brokerage. In Virginia, it is unusual for a buyer to pay any part of his/her agent’s commission.
Home Inspector
Is chosen by the buyer and works for the buyer.
Lender/Loan Officer
Is chosen by the buyer and works for the buyer.
Appraiser
Is hired by and works for the lender.
Settlement/Title Company
Is chosen by the buyer (although in certain transactions, the seller can request a “split settlement” and have a different settlement company perform the seller’s part of the settlement). The settlement company represents neither the buyer nor the seller but rather represents the contract. The settlement company obtains and prepares all the documents needed in order to close the transaction. If a disagreement arises at settlement, the settlement agent is a neutral party and will assist the listing agent and the buyer’s agent in resolving the issue.