What Is Buyer Agency?

What Is Buyer Agency and Why Is It Important As A Buyer?

 

In the state of Colorado, there is no such thing as a “dual-agency”. What this means is that if we are selling your house for you, we have an exclusive right-to-sell listing agreement with you. We are representing YOU to sell your house for the most amount money (fiduciary duty), and with the responsibility to negotiate and look out for your best interests in the transaction. We will know the innate details about your sale (things like what your bottom line is, or what you are willing to sell the house for), or other factors that might have a psychological impact on the home sale.

If we are representing you as a buyer’s agent, we have the fiduciary duty to look out for your best interests and find you the house you want and negotiate a contract on it, and you will want to pay the least amount of money possible for this house (unless you are unfathomably rich and don’t care, in which case, call us immediately).

See where we are getting at? How could we possibly represent both sides as an agent and have both sides at our best interest, while consummating a deal without having a conflict of interest? If your house is listed for $250,000, but I know you would take $225,000 just to get a deal done, how could I not tell my client that is a buyer that you would take as low as $225,000? It just wouldn’t work.

As a buyer, we feel that you would be hurting yourself by simply contacting the listing agents on each home and working through them. The fact of the matter is that most Realtor commissions are paid by the seller, so your representation during the buying process is very cheap, and could save you thousands more down the road by having an experienced, knowledgeable agent guide you through the process.

Is it possible to use one agent for both sides? Yes, sort of. In Colorado, there is a way to work for both sides, but not as an agent with a fiduciary duty. It is called being a Transaction Broker. What it means is that we help transact a deal between buyer and seller, but are not in any way allowed to negotiate or disclose details to either side. So basically, it’s between the buyer and seller to negotiate without my professional expertise going to either side.

You also have the ability to work through a transaction with and Agent to Customer relationship. This essentially means that the Listing Agent would still represent the seller in their full capacity, but the buyer gets treated as a customer, and again, get’s no representation to work in your best interest.

In some cases, where a deal is a very simple, straightforward transaction, a transaction broker can be very useful and money-saving. But in most residential transactions, it is in your best interest to hire a Realtor® that will fully represent you and ensure your success.