Most people understand the value of signing an agreement to work with a REALTOR® when it comes to selling their home. But let’s examine the value of signing a similar agreement – an Exclusive Buyer’s Agent contract – when it comes to buying a home.Understanding Agency In British Columbia, A Designated Agent is a specific agent within a brokerage that has been designated to work exclusively with a particular client. This legally separates that agent from all other agents within the brokerage as someone who will work solely for that client.
There are three types of agents: seller’s agent, buyer’s agent, and dual agent.
Seller or “listing” agents are legally obligated to represent the seller’s interests. This includes securing the best possible sale price with the terms most agreeable to the seller. It also includes maintaining absolute confidentiality for the seller and disclosing information about buyers or would-be buyers. The Seller agent’s absolute loyalty is to the seller, and only the seller.
A buyer’s agent represents only the buyer’s interests. The buyer’s agent has a duty to maintain the buyer’s absolute confidentiality, disclose information about the seller, research and advise the buyer on properties, and negotiate for the best possible price on behalf of the buyer.
Dual agency is when an agent or broker represents both the seller and the buyer and, to avoid conflict of interest by the REALTOR®, neither party can be fully represented. A REALTOR® in a dual agency is truly more of a referee or mediator for the transaction. Both the buyer and the seller must agree to allow the REALTOR® to act in a dual agency role. Dual Agency will likely disappear in 2018, more details are to be released by the Office of the Superintendent of Real Estate this spring.
Advantages of Hiring a Buyer Agent
When you sign an Exclusive Buyer’s Agent contract, you are agreeing to “hire” a personal representative who, by law, must represent your interests to the best of his or her ability.
A buyer’s agent will start by thoroughly evaluating your specific needs to help you locate the right property. He or she will become your personal specialist, seeking out properties, providing property and neighbourhood information, and carefully analyzing the market to help you make informed decisions. He or she will take you to see the properties you are interested in, and help identify any problems or issues.
Once you find the perfect home, your buyer’s agent will thoroughly explain and prepare the many detailed forms necessary for a purchase, help you structure your offer, and present the offer on your behalf. He or she will negotiate hard for the best possible purchase price and terms, and continue to work with you to ensure a smooth closing.
A buyer’s agent can also help guide you in securing appropriate financing and offer references to other services like home inspectors, movers, lawyers, and home improvement contractors. These services are especially helpful to out-of-town buyers who may not be familiar with the area.
The Exclusive Buyer’s Agent contract
If you choose to hire a buyer’s agent then you should clarify this relationship in a written legal contract, an Exclusive Buyer’s Agent contract. This outlines the terms of the relationship between you and your buyer’s agent, including the purpose of the relationship, the services offered, the duration of the agreement, and the terms of compensation.Making expectations clear right from the start – and putting them in writing – helps ensure your expectations will be met.