In real estate, I often find that prospective buyers do not have a clear grasp of “Buyer’s Agency”. Let me share with you what I tell them on first contact about buyer’s agency. Part of my explanation of the required Consumer Information Statement on NJ Real Estate Relationships covers buyer’s agency, as well as the other three relationships – seller’s agency, disclosed dual agency, and transaction agency. I’ll cover those three scenarios in later articles.
A buyer’s agent works only for the buyer! It’s that simple. They owe no loyalty to the seller, though it is their duty to treat him honestly. The buyer’s agent has fiduciary duties to the buyer, which include reasonable care, undivided loyalty, confidentiality, and full disclosure. In other words, whatever the buyer shares with the agent stays between them as long as their is no deceit involved. As an example, if the buyer bids $275,000 on a property listed for $310,000 but he tells the agent that he’ll go to full price if necessary to get the property, the agent can not disclose that to the seller or seller’s agent.
In viewing a prospective property together, the agent is obligated to point out any possible defects that a reasonable sight inspection would reveal. So the agent will mention that there’s a water stain on the bathroom ceiling or the garage roof seems to being hanging over the property line. Such things as structural or electrical deficiencies are beyond the expertise of the agent, but a home inspector will find and report them.
The obvious advantage to a buyer using a buyer’s agent is that the buyer gets to know the buyer’s criteria. Through their working relationship, the agent knows what features are most important to the buyer and what to avoid. This saves time and the frustration of looking at countless potential properties that don’t fit the bill. To top it off, the seller is paying the buyer’s agent’s commission at closing. That’s right. Getting your buyer’s agent’s years of experience and expertise didn’t cost you a dime!