What is a
Real Estate Buyer Agent?

A real estate buyer agent is a REALTOR® registered with a real estate brokerage who is involved in the practice of representing a buyer in a real estate transaction. Prior to the early 1990's, brokerages mainly represented sellers (formerly vendors) either directly as listing agents, or as sub-agents if working with a buyer (formerly purchasers).

In most Canadian provinces and American states, until the 1990s, buyers who sought the services of a real estate brokerage to help them find a home were legally considered customers of the brokerage. The sellers typically were the clients.

Then, buyer agency came along.

A brokerage may choose to work exclusively with sellers and never buyers - or with buyers and never sellers. A full service brokerage works with both, but all clients of the brokerage must agree in writing to dual agency. Most of the time, a seller would want their home to be shown, if not sold, to a buyer client of their listing brokerage. A seller wouldn't want to limit their options.

Also, a buyer would most likely prefer to have the option of viewing and offering on a listing of that listing brokerage. Both of these situations would result in ...

Multiple or Dual Agency

If the buyer wishes to have their own real estate buyer agent, and not with the listing brokerage of the property that interests them, they may choose to enter into a real estate buyer agent agreement with a different brokerage. If the buyer refuses to enter into this agreement with another brokerage, then they would be a customer of whatever brokerage they chose to work with. And that brokerage would then become a sub-agent of the seller's listing brokerage.

The real estate brokerage, upon entering into a written real estate buyer agent contract with a buyer, agrees to work with the buyer and the buyer agrees to ...

Exclusive Representation

... by that brokerage.

A buyer brokerage owes the buyer the duties of ...

* Loyalty to the buyer by acting in the buyer's best interest

* Confidentiality by not disclosing to the seller or the seller's agent, any facts that could influence the buyers ability to negotiate the best terms

* Disclosure to all parties in the transaction that the REALTOR® has been engaged as a buyer agent.

Whatever Happens in Vegas Stays in Vegas

Under the real estate buyer agent contract, or buyer agency agreement, the buyer agent owes to their buyer client a duty of confidentiality and full disclosure. That means whatever is discussed with them remains with them. The buyer agent must disclose to their client, any pertinent information they may acquire regarding the property, particularly anything on which the buyer is relying to make an informed decision.

The REALTOR® must negotiate the best possible terms for their buyer client.

Not unlike a listing agreement with a seller, a buyer agency agreement must have a commencement and expiry date, and include how the brokerage is to be paid. Usually, the seller pays the buyer (cooperating) brokerage through the listing brokerage, but occasionally, the buyer pays their own agent. It also details the duties and obligations of all parties to the buyer agency agreement.

Potential conflicts of interest can occur. An example might be when a buyer brokerage represents two buyers competing for the same property. And to further complicate the situation, the subject property might even be listed with the same brokerage. A real estate agency should have a written, objective policy on how such situations will be managed.

It can be complicated, but everyone must understand that in dual agency situations, REALTORS® must always act with ...

Fairness and Honesty

... with all parties, and maintain confidentiality with each client. All terms of any offers must be explained to each client's satisfaction, with full disclosure about the property. However ...

The Price Must Find it's Own Level

The dual agent cannot offer advice on price to any of the parties, nor discuss the motivation of any party with another.

Buyer agency seems more complicated that it really is. Provided the REALTORS® involved are experienced enough in this type of situation, everything can work out just fine for all concerned.

Click this link to learn more about the position of real estate buyer agent.

Return to Home Page