Hi all,
What are the implications of working with a transaction broker vs a buyers/sellers agent? I understand that they don’t work “for” a particular person, but what does that really mean to me in the long-run?
I talked with a realtor today. I really like him, he seems extremely competent at what he does (something I haven’t seen in any of the previous realtors I’ve worked with or known).
I’m going to sell my current residence with him, and he’ll act as a seller’s agent. The catch is that if he finds the buyer directly then he becomes a transaction broker. Could this turn negative for me or is it pretty safe?
The 2nd issues is that I hope to buy some future rentals in his area. Since I like him far above other realtors I’ve known, I’d love to work with him for these purchases. The problem here is that he does NOT work as a buyer’s agent for anyone. He will only act as a transaction broker for buyers. For those of you who are experienced, would you consider buying through a transaction broker rather than a buyer’s agent? Does it make any real difference? I know everyone says to have your own realtor when you’re buying so you have someone to represent you. Isn’t that benefit lost when your realtor is only acting as a transaction broker?
I am a realtor in Arizona. I am not aware of the laws in Colorado. However, this issue comes up often in debates among realtors everywhere. In Arizona it is known as dual agency.
The question is…can someone fairly represent both parties in a transaction involving real estate?
My answer is, probably not. For example, If I (as the realtor) know the buyer is willing to increase their offer by $5000, I can’t share that with the seller (my client). So, what if the seller asks me if they should counter-offer for $5000 more? In a transaction without dual agency, I could give a professional opinion.
On the other hand, If I restrict my realtor’s ability to do his or her job, he or she will probably be unable to bring the buyer to you. Also, you would be restricting any realtor associated with the same broker from showing your property. This is a huge mistake. One that I firmly believe outways the problem above.
fredaz,
Thanks for the response. According to my contract (not yet signed, just have for viewing) the relationship is NOT affected by another realtor within the brokerage bringing me a buyer. If that happens, my realtor would stay a seller’s agent. It ONLY changes if he personally brings the buyer.
I don’t know about the RE laws in your state, but in California it is the broker that represents the seller/buyer. So if Agent A gets a listing contract and Agent A works for Broker A, the listing belongs to Broker A and the seller is represented by Broker A. Agent B then brings a buyer to the table. Agent B also works for Broker A. Since Agent B is only and agent and cannot represent a buyer in an agency capacity, they are working under the supervision of Broker A. Therefore the relationship is really with Broker A. (Sort of like a bank employee helping you deposit a check. You are giving the money to the bank, the teller just represents the bank.)
In the above case, both buyer and seller are represented by Broker A and therefore it is a dual agency.
As far as selling your home, it probably will not mean anything. It is unlikey that your listing agent will bring the buyer. Of course, if you tell him that you don’t like the idea of him being a transactional broker, there is no chance of him bringing the buyer which is probably not good for you. In that case, what does he do with the potential buyers that call him about your house? You don’t want to limit yourself (in my opinion) by not letting your agent show your house to potential buyers. If your agent did find the buyer, you need to remember that he has to become a “neutral” party at that point.
As far as buying investment properties, I wouldn’t want to use someone that wasn’t a buyer’s agent but that is my opinion. In theory that measn that he is never working in your best interest and he is only working to further the transaction. I would also ask about confidentiality in those transactions. If you tell him something and he isn’t a buyer’s agent, does he keep it to himself or does he share it with the seller’s agent.