Agency Relationships

Agency Relationships The term "agency" is used to describe any relationship in which a real estate broker acts for or represents another in a real estate transaction. There are several types of agency relationships. The most common agency relationships are that of Buyer's Agent, Seller's Agent and Dual Agent. The BUYER'S AGENT represents the Buyer in the real estate transaction. The Buyer is the Client in this relationship, and the Buyer's Agent has the following responsibilities to the client: loyalty, disclosure, confidentiality, obedience, reasonable care and diligence, and accounting for all funds. If you are not represented as a Client, you are a Customer. Georgia law requires a written agreement between the real estate broker/agent and a Buyer Client. A Buyers Agency agreement establishes that your agent represents you in the search and purchase of a home, and you agree to work only with that agent. This agreement can be for one day, a week, a month, or any period of time. If you enjoy visiting Open Houses or new home communities on the weekend, be sure to inform the host agent that you have a Buyer's Agent. Typically, the Buyer's Agent will assist you in your lender selection and loan pre-qualification, home search, tour of listed homes that meet your criteria, assist you in writing an offer for purchase, and present that offer to the listing agent for the seller's consideration. After the Purchase and Sale Agreement is negotiated, the Buyer's Agent will schedule or assist you in scheduling your independent home inspection, and assist you in the negotiation of the Amendment to Remove Inspection Contingency. (I make every effort to attend home inspections to be another pair of eyes and ears). It is the Buyer's Agent's responsibility to guide the buyer through preparations for closing, review of the lender's Good Faith Estimate and HUD 1 (Settlement Statement), ordering of the hazard insurance policy and final property survey. The Buyer's Agent should attend the closing with the buyers. The SELLER'S AGENT (LISTING AGENT) represents the Seller in the transaction, and the Seller is the Client. The Seller's Agent has the same fiduciary responsibilities to the Seller as the Buyer's Agent has to the Buyer. The client relationship is established through a Listing Agreement, in which the term and all conditions of the listing are determined. Depending on the Listing Agreement, the Listing Agent may have the responsibility for ordering, maintaining and paying for initial and ongoing marketing. The Listing Agent keeps track of property showings, makes every attempt to get constructive feedback from showing agents, and guides the Seller in creating the environment for the home to sell at the best price and terms. When an offer comes in, the Listing Agent will review the offer with the Sellers and explain all aspects of the offer and their impact on the Sellers' legal position and net proceeds. The Listing Agent will assist the Sellers in preparing the home for a home inspection and negotiating the Amendment to Remove Inspection Contingency. The Listing Agent may also track the progress of the Buyer's loan, and keep in touch with the Selling Agent in regard to home repairs, termite reports, and closing details. A DUAL AGENT is an agent who represents both the Buyer and Seller in a single transaction and has a fiduciary responsibility to both parties. This will happen if the Listing Agent sells his/her own listing to a Buyer Client. Dual Agency is legal in Georgia, but disallowed by many real estate brokers. In the case where an agent has a client relationship with the Buyer and Seller in a transaction, it is common for the real estate broker to assign another agent in the company to represent the Buyer. Occasionally, an agent may work as a TRANSACTION AGENT, handling the paperwork but not representing the Buyer or the Seller. In this case, the buyer or seller is a CUSTOMER, and not a CLIENT. Whether representing the Buyer or Seller, the real estate agent must treat all parties in the transaction professionally, honestly, and must disclose known facts that may affect the value or condition of the house. Real Estate Commission generally is paid by the Seller to the Listing Broker. If there is a second agent involved in the sale, for instance a Buyer's Agent, half of the commission is paid by the Listing Broker to the Selling Broker. For instance, if the total commission is 6% of the selling price, 3% would be paid to the Selling Broker and 3% to the Listing Broker. Commission is negotiated with the seller at the time of listing. This commission is paid to the Broker (the company, not the agent), and the agent is paid by the broker in accordance to his/her broker contract. Finally, every licensed real estate agent is not a REALTOR®. Make sure your agent is a member of the National Association of Realtors® and the Georgia Association of REALTORS®. FAQ *Frequently Asked Questions About Agency* Q Who pays the real estate broker? A Generally, the real estate commission is paid by the Seller to the listing broker. If the Buyer is represented by a Buyer's Agent, the commission is split between the two real estate brokers (companies). The real estate agents are paid in accordance with their broker agreements. Q Who pays for the marketing and multiple listing fees for a listed home? A Typically, the Listing Broker or Agent pays all marketing costs, but the listing broker may charge a retainer fee. In new home communities, the Builder often pays for marketing. If the listing is terminated by the Seller before it expires, the seller may be responsible for reimbursing the real estate broker for marketing expenses. Q How can a Buyer's Agent help me in my home purchase? A Although real estate agents use many marketing vehicles, including home magazines, multiple listing services and others, home availability changes from one minute to the next. A real estate agent can check new listings based on your criteria, find additional confidential information and and verify availability before touring the home. Keep in mind that certain counties and cities, including Gwinnett County, Duluth, Alpharetta, and Decatur, prohibit real estate directional signs, so it is very difficult to drive around and and find homes for sale. When it's time to make an offer, your agent can check neighborhood sale history and the tax records for the home to determine the fair market value. She will negotiate your contract, always keeping your interests in mind. After your contract is accepted, your agent will guide you through the process of loan application, home inspections and closing. Q What are a Buyer's responsibilities under a Buyer's Agency Agreement? A Actually, a Buyer's Agency Agreement can be for any period of time, from one day to one year or beyond. As a Buyer's Agent, I typically will show you properties listed by a real estate company agreeing to co-op, or a "For Sale By Owner" for which I have a prior written agreement with the Seller. If you purchase a home you found through my efforts, the listing broker will split the commission with my broker, Solid Source Realty, Inc.. If you find a listed home through my efforts and purchase it with my assistance, you will not be obligated to pay a real estate commission. Q Is every real estate agent a REALTOR® ? A No. Only agents belonging the National Association of REALTORS®, a professional organization, are REALTORS®. REALTORS® are held to a strict code of ethics. Top of Page Is there any real difference between one Real Estate Agent and another? Consider these important issues before you make a decision: How long has the real estate agent been licensed? Is he/she experienced selling homes in your area? Is the real estate agent a REALTOR® (a member of the National Association of REALTORS®)? REALTORS® must adhere to a strict Code of Ethics. Is the agent's real estate office a member of BOTH listing services in Atlanta? Is the agent Computer and Tech savvy? What is the agent's Marketing Plan for your home? Will the agent be accessible and return telephone calls promptly, or will you be dealing mostly with an assistant? If you are purchasing a home, does your agent have experience as a Buyer's Agent? Do you have a good rapport with the agent, and does the agent put client service first? I'll be there for you every step of the way, through your home marketing or search, contract negotiations, home inspection, and closing. If you are considering selling your current home, please visit my MARKETING web page to see how your home can have the maximum exposure in a competitive marketplace! Pat Sabin, REALTOR® Call Direct: (770) 490-1633 Office: (770) 475-1130, Ext 8476 E-Mail: greathomes@patsabin.com Back to Pat Sabin's Home Page DISCLAIMER: All information herein is is believed to be accurate and timely, but not warranty as such is expressed or implied. Much of the information pertains to residential real estate in the State of Georgia. Be sure to check with your state and local authorities for accurate and up to date information. © 1999-2011 Pat Sabin

The term "agency" is used to describe any relationship in which a real estate broker acts for or represents another in a real estate transaction. There are several types of agency relationships.

The most common agency relationships are that of Buyer's Agent, Seller's Agent and Dual Agent.

The BUYER'S AGENT represents the Buyer in the real estate transaction. The Buyer is the Client in this relationship, and the Buyer's Agent has the following responsibilities to the client: loyalty, disclosure, confidentiality, obedience, reasonable care and diligence, and accounting for all funds. If you are not represented as a Client, you are a Customer.

Georgia law requires a written agreement between the real estate broker/agent and a Buyer Client. A Buyers Agency agreement establishes that your agent represents you in the search and purchase of a home, and you agree to work only with that agent. This agreement can be for one day, a week, a month, or any period of time. If you enjoy visiting Open Houses or new home communities on the weekend, be sure to inform the host agent that you have a Buyer's Agent.

Typically, the Buyer's Agent will assist you in your lender selection and loan pre-qualification, home search, tour of listed homes that meet your criteria, assist you in writing an offer for purchase, and present that offer to the listing agent for the seller's consideration.

After the Purchase and Sale Agreement is negotiated, the Buyer's Agent will schedule or assist you in scheduling your independent home inspection, and assist you in the negotiation of the Amendment to Remove Inspection Contingency. (I make every effort to attend home inspections to be another pair of eyes and ears).

It is the Buyer's Agent's responsibility to guide the buyer through preparations for closing, review of the lender's Good Faith Estimate and HUD 1 (Settlement Statement), ordering of the hazard insurance policy and final property survey. The Buyer's Agent should attend the closing with the buyers.

The SELLER'S AGENT (LISTING AGENT) represents the Seller in the transaction, and the Seller is the Client. The Seller's Agent has the same fiduciary responsibilities to the Seller as the Buyer's Agent has to the Buyer. The client relationship is established through a Listing Agreement, in which the term and all conditions of the listing are determined.

Depending on the Listing Agreement, the Listing Agent may have the responsibility for ordering, maintaining and paying for initial and ongoing marketing. The Listing Agent keeps track of property showings, makes every attempt to get constructive feedback from showing agents, and guides the Seller in creating the environment for the home to sell at the best price and terms.

When an offer comes in, the Listing Agent will review the offer with the Sellers and explain all aspects of the offer and their impact on the Sellers' legal position and net proceeds. The Listing Agent will assist the Sellers in preparing the home for a home inspection and negotiating the Amendment to Remove Inspection Contingency.

The Listing Agent may also track the progress of the Buyer's loan, and keep in touch with the Selling Agent in regard to home repairs, termite reports, and closing details.

A DUAL AGENT is an agent who represents both the Buyer and Seller in a single transaction and has a fiduciary responsibility to both parties. This will happen if the Listing Agent sells his/her own listing to a Buyer Client. Dual Agency is legal in Georgia, but disallowed by many real estate brokers. In the case where an agent has a client relationship with the Buyer and Seller in a transaction, it is common for the real estate broker to assign another agent in the company to represent the Buyer.

Occasionally, an agent may work as a TRANSACTION AGENT, handling the paperwork but not representing the Buyer or the Seller. In this case, the buyer or seller is a CUSTOMER, and not a CLIENT.

Whether representing the Buyer or Seller, the real estate agent must treat all parties in the transaction professionally, honestly, and must disclose known facts that may affect the value or condition of the house.

If there is a second agent involved in the sale, for instance a Buyer's Agent, half of the commission is paid by the Listing Broker to the Selling Broker. For instance, if the total commission is 6% of the selling price, 3% would be paid to the Selling Broker and 3% to the Listing Broker. Commission is negotiated with the seller at the time of listing. This commission is paid to the Broker (the company, not the agent), and the agent is paid by the broker in accordance to his/her broker contract.

Finally, every licensed real estate agent is not a REALTOR®. Make sure your agent is a member of the National Association of Realtors® and the Georgia Association of REALTORS®.

A
Generally, the real estate commission is paid by the Seller to the listing broker. If the Buyer is represented by a Buyer's Agent, the commission is split between the two real estate brokers (companies). The real estate agents are paid in accordance with their broker agreements.

A
Typically, the Listing Broker or Agent pays all marketing costs, but the listing broker may charge a retainer fee. In new home communities, the Builder often pays for marketing. If the listing is terminated by the Seller before it expires, the seller may be responsible for reimbursing the real estate broker for marketing expenses.

A
Although real estate agents use many marketing vehicles, including home magazines, multiple listing services and others, home availability changes from one minute to the next. A real estate agent can check new listings based on your criteria, find additional confidential information and and verify availability before touring the home. Keep in mind that certain counties and cities, including Gwinnett County, Duluth, Alpharetta, and Decatur, prohibit real estate directional signs, so it is very difficult to drive around and and find homes for sale.

When it's time to make an offer, your agent can check neighborhood sale history and the tax records for the home to determine the fair market value. She will negotiate your contract, always keeping your interests in mind. After your contract is accepted, your agent will guide you through the process of loan application, home inspections and
closing.

A
Actually, a Buyer's Agency Agreement can be for any period of time, from one day to one year or beyond. As a Buyer's Agent, I typically will show you properties listed by a real estate company agreeing to co-op, or a "For Sale By Owner" for which I have a prior written agreement with the Seller. If you purchase a home you found through my efforts, the listing broker will split the commission with my broker, Solid Source Realty, Inc..

If you find a listed home through my efforts and purchase it with my assistance, you will not be obligated to pay a real estate commission.

A
No. Only agents belonging the National Association of REALTORS®, a professional organization, are REALTORS®. REALTORS® are held to a strict code of ethics.

Pat Sabin, REALTOR®
Solid Source Realty, Inc

Call Direct: (770) 490-1633
Office: (770) 475-1130, Ext 8476
E-Mail: greathomes@patsabin.com

Back to Pat Sabin's Home Page

DISCLAIMER: All information herein is is believed to be accurate and timely, but not warranty as such is expressed or implied. Much of the information pertains to residential real estate in the State of Georgia. Be sure to check with your state and local authorities for accurate and up to date information.