Buying A Home...Read This First
Leo McKittrick and/or McKittrick and Associates do not provide legal or tax advice. We want you to have the necessary information to make the best, informed decision for your situation. We strongly suggest that you seek professional advice.
We'll look at the portion of the Agency Law that pertains to “Who does or does not represent the buyer during the purchase of real estate”. I’ll explain the distinction between a real estate agent and a realtor, also.
All sellers are represented by the listing agent and the agent’s broker(s), hereinafter called “listing agent” by entering into a contract. The listing contract basically states that the “listing agent” is required by law to keep the seller’s best interest in mind at all times. The "listing agent" is required by law to put the seller’s best interest ahead of the buyer’s best interest and the listing agent’s own best interest.
An example would be that the listing agent is aware of a water spot on the ceiling in a bedroom closet. The agent would not mention or show the buyer that water spot. Why? It is not in the seller’s best interest for that water spot to be known. The seller could sue the "listing agent" for mentioning the water spot. The law does not require the listing agent to point it out. The old saying “Buyer Beware!!” applies.
Before we look at this water spot example from the buyer’s perspective, you need to know the difference between a real estate agent and a realtor. A Real Estate Agent is someone who has entered into a contract with the buyer to represent the buyer’s best interest. The contract is called an “Exclusive Buyer Brokerage Agreement”. This contract basically states that the real estate agent and his/her broker needs to put the buyer’s best interest in front of all others, including their own. In exchange for this legal binding pledge, the buyer must purchase their next home with the assistance of this person. This is a real estate agent. This is also called a “Broker – Client” relationship. The buyer’s best interest comes before anyone else’s.
Say the buyer does not want to enter into an “Exclusive Buyer Brokerage Agreement”. Then, the real estate agent becomes a realtor. A Realtor does ministerial acts only during the process of purchasing or leasing real estate. Ministerial acts are for example, identifying property for sale or lease, providing pre-printed real estate form contracts, preparing real estate contracts at the direction of the customer, locating lenders, building inspectors and closing attorneys on behalf of the customer. This is called a “Broker – Customer” relationship.
The real estate agent will assist the buyer with preparing the real estate contracts instead of the realtor following the directions of the buyer. The real estate agent keeps the buyer's best interest in mind ay all times. A realtor is not required to keep the buyer's best interest in mind.
Now back to the example of the water spot. The real estate agent is required by law to point out the water spot if he/she sees it. The realtor may or may not point out the water spot to the buyer. The law does not require the realtor to point out the water spot.
The vast majority of Buyers believe it will cost them more money by having a real estate agent who is looking out for their best interest. That is not true!! When the listing agent and the seller entered into the listing contract to sell the real estate, the seller agreed to pay the listing agent/broker a commission. In the listing contract it states what portion of the commission will be paid to the real estate agent or the realtor that brings a buyer, who purchases the real estate. If the buyer uses the listing agent then the listing agent receives 100% of the commssion. The listing agent must place the seller's best interest above all others even though the listing agent received 100% of the commission. So, why not use a real estate agent and have that person represent your best interests?
I can be reached at (912) 667-7355 or by email at firstname.lastname@example.org. McKittrick and Associates looks forward to assisting you with the purchase of your next home or the sale of your current home.
We specialize in assisting buyers in the I-16 corridor and the I-95 corridor.
Do you agree that it is best to have a real estate agent assist you with the purchase of your house?