What is a Buyer's Agent?
Although the law that established Buyer's Agency went into effect in 1994, many agents still are not comfortable discussing the relationship with potential buyers and do not understand the implications of agency relationships in today's real estate world. Prior to 1994, all agents were legally obligated to represent the seller and their best interests. As you might imagine, many buyers felt that the agent who had been showing them properties was working on their behalf. Under today's law, there are four different Agency relationships that a real estate licensee may establish with clients.
View Michigan Agency Disclosure Form
Buyer's Agency
A buyer's agent acts solely on behalf of the buyer. A buyer's agent will disclose to the buyer known information about the seller which may be used to benefit the buyer. The duties a buyer's agent owe to the buyer include; promoting the best interest of the buyer, fully disclosing all facts that might affect or influence the buyer's decision to tender an offer to purchase, keeping confidential the buyer's motivation for buying, presenting all offers on behalf of the buyer, disclosing to the buyer all known information about the willingness of the seller to complete the sale or to accept a lower price. Choosing to use a buyer's agent will only help if the agent you choose has a solid depth of knowledge and expertise. If problems occur during the transaction such as poor inspection results, title insurance problems or other unforeseen problems, the buyer's agent will help to remedy these problems to the buyer's satisfaction.
As described in the Agency Disclosure Form:
"A buyer's agent, under a buyer's agency agreement with the buyer, acts solely on behalf of the buyer. A subagent of the buyer is one who has agreed to work with the buyer's agent and who, like the buyer's agent, acts solely on behalf of the buyer. Buyer's agents and their subagents will disclose to the buyer known information about the seller which may be used to benefit the buyer.
Seller's Agency
A seller's agent, under a listing agreement with the seller, acts solely on behalf of the seller. Seller's agents will disclose to the seller known information about the buyer which may be used to the benefit of the seller. The duties that a seller's agent owe to the seller include; promoting the best interest of the seller, fully disclosing to the seller all facts that might affect or influence the seller's decision to accept an offer to purchase, keeping confidential the seller's motivations for selling, presenting all offers to the seller, disclosing the identities of all buyers and all information about the willingness of those buyers to complete the sale or to offer a higher price.
As described in the Agency Disclosure Form:
"A seller's agent, under a listing agreement with the seller, acts solely on behalf of the seller. A seller can authorize a seller's agent to work with subagents, buyer's agents and/or transaction coordinators. A subagent of the seller is one who has agreed to work with the listing agent, and who, like the listing agent, acts solely on behalf of the seller. Seller's agents and their subagents will disclose to the seller known information about the buyer which may be used to the benefit of the seller.
Dual Agency
A real estate licensee can be the agent of both the seller and the buyer in a transaction, but only with the knowledge and informed consent, in writing, of both the buyer and seller. In such a dual agency situation, the licensee will not be able to disclose all known information to either the seller or the buyer. As a dual agent, the licensee will not be able to provide the full range of fiduciary duties to the seller or the buyer. The obligations of a dual agent are subject to any specific provisions set forth in any agreement between the dual agent, the seller, and the buyer.
As described in the Agency Disclosure Form:
"A real estate licensee can be the agent of both the seller and the buyer in a transaction, but only with the knowledge and informed consent, in writing, of both the seller and the buyer.
In such a dual agency situation, the licensee will not be able to disclose all known information to either the seller or the buyer. As a dual agent, the licensee will not be able to provide the full range of fiduciary duties to the seller or the buyer.
The obligations of a dual agent are subject to any specific provisions set forth in any agreement between the dual agent, the seller and the buyer."
Transaction Coordinator
A transaction coordinator is a licensee who is not acting as an agent of either the seller or buyer, yet is providing services to complete a real estate transaction. The transaction coordinator is not the advocate of either party and therefore cannot "negotiate" for either party. The responsibilities of the transaction coordinator typically include; providing access to and the showing of the property, providing access to market information, providing assistance in the preparation of a buy and sell agreement which reflects the terms of the parties' agreement, presenting a buy and sell agreement and any subsequent counteroffers, and assisting all parties in undertaking steps necessary to carry out the agreement.
As described in the Agency Disclosure Form:
"A transaction coordinator is a licensee who is not acting as an agent of either the seller or the buyer, yet is providing services to complete a real estate transaction. The transaction coordinator is not an agent for either party and therefore owes no fiduciary duty to either party".
The intricacies of agency relationships can be difficult to understand and this is just a brief summary of those relationships. To discuss any of these issues or any other related matters, please do not hesitate to reach us through the website or call us at (877) 820-1194. We hope to be able to help you soon in your search for the perfect property.