Posted on February 18, 2010 by Rogue Agent

Most states have rules about agency.    An agent is either a buyer’s agent, a seller’s agent, or the person is working for both sides of the table which is called a dual agent.  A buyer’s agent, simple enough, is suppose to work for the buyer.  That means the agent has a fiduciary duty to  work ONLY  in the buyer’s best interest. Do you think this is how it’s done in practice? How is it even possible?  Think about it…WHO’S PAYING THE BUYER’S AGENT?!   THE SELLER?

The buyer’s agent is working for the buyer but gets paid by the seller.  Makes sense.  Not to me.  Sometimes, the seller offers additional incentives to agents to encourage “buyer’s agents” to bring clients by their property.  These incentives could be anything from a flat fee bonus to an additional percentage of the sales price as compensation.

In our market, there are tons of track homes available in the resale market.  Its hard to differentiate one home from the other.  So what do sellers do: they offer incentives to the “buyer’s agent” to get them to bring clients to their home.  Like a fly to honey, the agents will march to the home with the extra carrot dangling from it.  The original idea of buyer agency was to ensure proper representation for buyers in real estate transactions.  The idea is good but they forgot to have the buyer pay their agent.  If agents were getting paid by their buyers, I guarantee that representation would be top notch.