By Nana Nyarko
Intern, Press, Potter & Dozier, LLC
Intern, Counselors Title, LLC
Intern, Counselors Title, LLC
JD Candidate May 2013
Catholic University of America,
Columbus School of Law
In real estate transactions today it
can be difficult to figure out who is really representing your interests and
who is representing the other side.
Closings for the sale of real
property often include buyer’s agents, listing agents, closing agents and
settlement attorneys. In these transactions, there are differences among all of
these people and whom they actually represent during the real estate process
and at closing. These differences matter.
Buyers and sellers often are unaware
of the difference between a buyer’s agent and a listing agent and whom they
represent in a transaction. Buyers should be aware that when they call on a
listing they see online or in the newspaper to get more information, the agent represents the seller and has
loyalty to that seller when negotiating a sales price. This agent is known as the “listing agent.”
Because a listing agent is working
on the seller’s behalf, his or her job is to get an offer at the highest price for
the seller’s benefit. This creates a
natural conflict of interest with a buyer’s goal of purchasing the house at the
lowest and best price they can.
For example, a colleague and his wife,
while purchasing their first house, were discussing the price they were willing
to pay with the listing agent. His wife told the agent that their offer was not
the most they would pay; that if the seller did not accept the initial price, they
were prepared to increase their offer and by how much.
Surprise!
The seller rejected the initial
offer and countered, offering to sell for the exact amount they had told the
agent. The listing agent did the correct
thing by sharing this information with the seller since his or her duty of
loyalty lies with the seller. The agent had no duty to keep the price
discussion confidential and used that information to enable the seller to
obtain a higher price.
When preparing to purchase a home,
it is in the best interest of the buyer to find and work with an experienced buyer’s
agent who will not only have the buyer’s best interests in mind, but who also
has a duty to be loyal to the buyer when negotiating the purchase price.
It is best to make sure you are
working with a dedicated buyer’s agent by signing an Exclusive Buyer Agency Agreement
that binds your agent to work on your behalf and not the sellers. This is a huge benefit to the buyer because
it helps to avoid paying more than necessary to purchase the perfect home.
The real estate agents are there to
assist you. An agent who is representing
your interests is your closest ally in the transaction.
For more information on who really
represents whom, you can read this article written by John Adams for Realtor.com
For help with other residential and
commercial real estate and business needs contact the attorneys at Press,
Potter & Dozier, LLC at http://www.presspotterlaw.com/
Next
week’s blog will discuss the role of the settlement attorney in real estate
transactions.
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