Buyer's Agency.........

In Tennessee and most other states. A Real Estate Agent is licensed by the state and must conform to and conduct business matters in a pre-described and monitored method. The licensee is subject to these rules and, licensing depends on compliance.  An oath is signed and attested that in the practice of this profession....we as realty agents will treat all parties fairly within the parameters of laws ruling the profession and a "code" of ethics.  That's the good news.

However...under those same laws, we are required to establish a declared agency relationship within a transaction (Buyer/Seller or both, or none). This is effected initially by verbal agreement and discussion between the Agent and the Buyer/Seller by law and ultimately... established by contract/document as part of the transaction. The law states that whichever party we establish this relationship with...we are a bound "fiduciary" for that specific party. Click here for more info on "fiduciaries". http://en.wikipedia.org/wiki/Fiduciary_duty 

In situations where YOU the Buyer find a home that is listed by a Real Estate company...it is important that you understand that the Listing Agent and Listing Company have an agency Agreement with the Seller. They are compelled by law and contract to represent the Seller in all matters...primarily.

Law states...while the agent is under a type of oath to treat both Buyer and Seller to a transaction fairly and equally...the law requires that details, facts and discussions discovered by the Listing Agent when talking to a potential buyer, the desires, wishes, thoughts, conversations, financial decisions or other information discovered is required to be delivered to the Seller. On the other hand....The Buyer does not have this fiduciary privilege.....and, information discovered concerning the Seller is private and protected under the framework of the law and is not shared or delivered to the Buyer.

This leaves the Buyer at a little bit of a disadvantage at best....Specifically consider the offer and  negotiation process. When you make an offer on a home....and that offer is taken by the listing Agent or listing company....You, the Buyer ...have entered a adversarial position where the listing agent is working for the Seller in every capacity and solely to serve the contract and eventual sale of the property. The Buyer is at a disadvantage in this scenario.  If you have real lawful, fiduciary, legal representation by a Buyer's Agent.... You have more power and control over your own affairs and an increased ability to negotiate and secure the transaction under your terms...in private.

Typically...the Seller pays any realty fees or commissions associated with the sale. These fees are part of the listing process where the Seller agrees to pay the "Selling Agent, Listing Agent, Buyer's agent and Company " fees as part of the cost of sale associated with the listing and is part of the negotiated sales price. There may be situations where other arrangement can be made and should be made where the fees are paid by the Buyer but...this is typically more suited to the investor or commercial properties.

This is important stuff even if it is outside the mainstream understanding or familiarity of Buyers or Sellers.  It is important enough that the entire real estate industry was revamped several years ago to establish these new rules and procedures that specifically detail and incorporate the Fiduciary Declaration of Agency status as part of every real estate transaction.

For more information about Buyer's Agency and how it may affect or enable you in your future transactions...lets talk.