You already know there are listing agents and selling agents in real estate. Listing agents focus their attention on adding inventory, usually posting their properties in the Multiple Listing Service, exposing the property to all other members. A selling agent is the one who actually brings the offer to purchase. Often, these are called buyers agents. The distinction is so relevant that the State of Idaho requires that an informative brochure detailing “Agency Law” is presented to all parties of a real estate transaction, “at the first substantial business contact”.
The brochure lays out the types of agency relationships as defined by Idaho Code under Title 54. The brochure you receive will state, in a highlighted box, “Remember! Unless you enter a written agreement for Agency Representation you will NOT be represented at all.”
Sellers almost always sign a formal agreement for representation. This listing agreement outlines the broker’s role in representing the property’s owner and details how the broker will be paid, as well as what the broker agrees to pay to a “cooperating” broker. That is to say, the share of the commission to be paid to the selling brokerage. Agents are not allowed to list properties without the broker being the responsible party. Agents may represent the broker, as is usually the case, but the liability for performance is always with the broker.
Many buyers will search for property without a written agreement. The State considers those persons as “Customers”. Under the law a customer may expect a “non-agent” representing their broker to;
Perform necessary and customary acts to assist you in the purchase or sale of real estate.
Perform these acts in good faith and with honesty and reasonable care.
Properly account for money or other property you place in the licensee’s care.
Disclose “adverse material facts” to you which are, or should be, within the licensee’s knowledge.
In bold text the brochure states: “As a Customer, your brokerage will not act as your Agent and is not required to promote your best interests or keep your bargaining information confidential. If you use the services of a brokerage without a written agreement, you will remain a Customer.” So, if you would like to have your bargaining information kept confidential, you probably want a representation agreement which then makes you a “Client” under the law. The duties to a client are broader. Most notably the agent is required to, “Maintain the confidentiality of some client information, including bargaining information, even after the representation has ended.”
In addition to making you a client, your “Buyers Representation Agreement” will also enumerate the types of real estate your agent will show you, the geography where that real estate may be found and how the broker will be compensated. A broker may agree to only the compensation offered through the listing agreement, or they may require a retainer, hourly rate, or a commission in addition to that offered by the listing brokerage. Your agent may also be willing to seek out, “For Sale by Owner” properties. Your agreement will address how the brokerage will be paid for these efforts as well.
If you go directly to a listing agent to buy a property, remember that the broker’s first loyalty is to the seller, with whom they have a written agreement (contract). As a buyer with the seller’s brokerage you have a right to be represented as well. There are two options under “Limited Dual Agency”:
Limited Dual Agency without Assigned Agents: As a Limited Dual Agent, the brokerage and its licensees cannot advocate on behalf of one client over the other. The licensees cannot disclose confidential client information.
Limited Dual Agency with Assigned Agents: If your brokerage has obtained consent to represent both parties as a Limited Dual Agent, it may assign individual licensees (“Assigned Agents”) to act solely on behalf of each party.
No matter which way you decide to go, a buyer’s agent from a brokerage different from the seller, or under a limited dual agency relationship, make sure you are protected by getting an agreement in writing that memorializes how you and your brokerage are going to work together. To read the entire brochure, contact your agent or go to: http://irec.idaho.gov/publcs/agency-disclosure-brochure.pdf