agency disclosure

I am in the process of buying a house. How can I make certain that a real estate agent is working in my interest?

You must hire the agent and the agent's company to represent you by signing a contract typically referred to as a “buyer brokerage agreement." The real estate company (and its agents) promise to legally represent you and work in your best interests as they show you houses, negotiate price and terms, prepare a contract, and help you close the deal. As the buyer, you promise to use only this company in your home search. Typically there are no fees paid in advance, and the company is paid at closing from a portion of the commission paid by the seller

Most real estate companies also list properties for sale, in which case they are representing the seller. So if you buy a home listed by the company you hired, does that company represent you or the seller? The answer is both, through a relationship known as “dual agency." Dual agency occurs often and is hardly ever an issue, unless the agent you are working with is also the listing agent of the home you want to buy. In this case, the company's broker/manager has the option of designating another agent within the company to assist you in buying the home. This provides some degree of “arm's length" separation among the parties so the seller and buyer can have more assurance that their interests are being properly represented without any conflict

In reality, most buyers do not hire a company in advance, because they do not want to be tied down to one agent or company in their home search. If they find a home they want to buy through an agent, the sales contract they sign will designate the agent's company as representing the buyer in this particular transaction only.

Scott Alderman, Broker and President, First Commercial Real Estate, Valdosta, GA