It is easy to sometimes get lost in the world of real estate terminology. That’s why each week I am gong to post a blog to explain different terms and vocabulary that you should understand when buying a home.
This week is focused on the word “agent.”
An agent is a person who legally represents another, called a principal, and from whom they derive express or implied authority. In other words, an agent is someone who acts on behalf of another person. In North Carolina real estate, there are several different types of agency of which you should be aware.
Sellers agent: The seller’s agent, not surprisingly, works for the individual or company who is selling property. Their job is to represent the owner of the property being sold. They owe everyone else honestly, fairness, and material facts. But, their primary role is to protect the interests of and get the best deal for the seller. In the case of new construction, remember that the on-site agent in model homes works for the builder (who is the seller), not you as the buyer.
Buyer’s agent: As you can guess, this agent represents the buyer. When you hire a buyer’s agent, their primary job is to protect your interests in the process of a real estate purchase. Like a seller’s agent, they owe honesty and fairness to everyone else. However, their main job is to represent you. An important thing to note is until you expressly make someone your buyer’s agent, that agent works for the seller under what is known as “sub-agency.”
Seller sub-agent: If you are speaking to a real estate agent who has not yet become your buyer’s agent, you should be somewhat guarded in what you tell them. Because until you officially (orally or in writing) hire them to be your agent, they technically work for the seller. This is known as “seller sub-agency.” Until they are hired to represent you, just assume they represent the seller!
Dual agency: This may be the most confusing agency status. When you hire an agent as either a buyer or seller, you are actually hiring the agent’s firm. Agents from across that firm will represent many buyers and sellers. If you have a home for sale, you likely want to have as many potential buyers as possible. However, unless you agree to dual agency, other agents with your agent’s firm would not be able to make an offer. That’s because technically the firm is representing both the buyer and seller, and you have to grant them the ability to do that. Most often, firms practice “designated dual agency,” which means your information as buyer or seller is kept away from the other side of the transaction, protecting you.
All of these statuses can make your head spin! That’s one reason why all agents should present you with a “working with real estate agents” brochure before you share confidential information. Doing so is required by the North Carolina Real Estate Commission.
- Gary A. Miller