Who Represents You in a Real Estate Transaction?

When you enter into a real estate transaction, whom can you trust with confidential information?  

 

Before 1997 all real estate agents were bound by law to represent the interests of the seller. So even if your agent showed you a home on which you then made an offer, anything you had shared with him/her up to that time could be conveyed to the seller. If your comments divulged information the seller could use to his/her own advantage in negotiation, the agent was required to pass it on.

 

That all changed with the adoption in the State of Washington of the Law of Real Estate Agency. Now when a broker works with a client for purposes of buying a home or other real estate, the broker is bound by law to seek and protect the interests of the buyer.  Likewise, when a broker works with a homeowner for purposes of selling their home, he/she must seek and protect the interests of the seller.

 

What does this mean to you?

 

It means you can speak freely with your broker whose activity is directed toward helping you buy OR sell a home.  When you tour an open house, ask the agent attending the house if he/she is representing the seller. If so, anything you say about your ability to buy the home can and will be shared with the seller. You should simply and graciously let the seller's agent know you have an agent of your own acting as a buyer's agent. As a buyer, you may speak confidentially with your buyer's agent.  As a seller, you may speak confidentially with your seller's agent. If you have no agent, the open house host may become your buyer's agent for other properties, but not for that one.

 

So who is a buyer's agent and who is a seller's agent? The law provides that as soon as an agent/broker engages in service to you in either role, he/she is bound to conduct him/herself as your agent in that role.

 

An agent in either role owes the client specific duties: a) to exercise reasonable skill and care, b) to deal honestly and in good faith, c) to present all written offers, notices and other communications in a timely manner, d) to disclose all known existing and not readily ascertainable material facts, e) to account for all money and property received, and f) to provide a pamphlet on the law of agency in the form prescribed by law.

 

The additional duties of a seller's agent are, in a nutshell, loyalty, timely disclosure, advising the seller to seek expert advice, confidentiality and good faith effort.

 

The additional duties of a buyer's agent are the same with respect to a prospective buyer.

 

Most agents will very seldom agree to work in both roles at the same time on a single property. The possibility of liability for conflict of interest is simply too great.

 

Be sure you understand who's working for whom and discuss this openly with your own agent/broker.

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