Agency Relationships In Minnesota
It’s the law…Agency
Every listing agreement and buyer agency agreement for real estate services contains a description of agent duties and relationships. In Minnesota, real estate agents are required to discuss with homebuyers and sellers what types of agency relationships are available early in the relationship. Before a Real Estate Agent can represent you, the agent must have you sign a written agency agreement: a “listing contract” if you are selling and a “buyer agency contract” if you are buying.
An agent who lists a property and represents and acts on behalf of the seller.
An agent who represents a buyer and acts on the side of the buyer.
This occurs when the agent is representing both the buyer and the seller in a transaction, or when two agents working for the same real estate company each represent a party in the transaction. This requires consent of all parties, and all confidential information about price, terms and motivation of any party involved are kept confidential. Dual agents may not advocate for one party to the detriment of the other. Dual agency is practiced in a large number of real estate transactions in the Rochester area. If a buyer(s) decide not to agree to a dual agency, they may give up their opportunity to purchase properties listed by their real estate agents company. If a seller decides not to agree to a dual agency relationship, the seller may give up the opportunity to sell the property to a buyer representative by their real estate agency company.
How Does Buyer Representation Work?
In every real estate transaction there are two sides: the seller and the buyer. As an agent, I always represent someone’s interests. That someone is the party with whom I have a contract. Unless I have a contract with you, the buyer, no matter how friendly we become, my loyalty and fiduciary responsibilities must be to the party with whom there is a contract – the seller.
What Happens If Your Company Also Represents The Seller?
This is known as a dual agent. I represent both you and the seller. The discussions regarding price, term of contract and the motivation of you and the seller are confidential and do not get discussed with the other party. As a dual agent I cannot work to the detriment of either Party. Although this description of dual agent is brief, feel free to contact me for more complete details.
What Are The Benefits To The Buyer?
With either type of agency, I am required to treat you with honesty and fairness, to assist you in selecting a property, and to disclose to you any known material defects in the properties that I show you. As your buyer agent, I can give you my loyalty, and there is confidentiality. I am working in your interest. As your agent, you can level with me. I am negotiating and facilitating throughout the process of buying a home.
What Are The Disadvantages To The Buyer?
Arguably, there are no disadvantages, but there is a contractual responsibility. As your representative, I am working in your interest. But just as a seller has a contract to sell through his or her agent, you as a buyer client have a contractual responsibility to buy your home through me during the time the contract covers, even if you find a property on your own.
Is It In The Seller’s Interest To Work With Buyer Agents?
Absolutely! Working with Buyer Agents provides the home seller with the maximum exposure of their home, highly motivated and qualified buyers and no liability for a sub-agent's actions or misrepresentations to the buyer.
Will It Cost Me Extra To Have My Own Representation As A Buyer?
NO! The seller pays my fee on all property listed through the Multiple Listing Service (MLS). In the case of a For Sale By Owner, many have already included a fee for the Buyer’s Broker because they recognize the value of a professional Realtor showing their home to potential buyers.
Look for an Accredited Buyer’s Representative (ABR®) when selecting an agent!