When we bought our last house in Georgia, I did what many buyers do. I called the number of the agent on the sign in the yard and made an appointment to see the house. I did not really consider that the person showing me the house was the seller's agent, and I certainly did not know what that meant. I just knew I wanted to see the house and this person had the keys. We went on to buy that house without ever getting our own agent to represent us, and let me tell you, it was a very unpleasant experience. If I only knew then what I know now. Luckily for you I am here to share my knowledge with you.
The agent whose name is on the sign in front of the house is the listing or seller's agent which means she represents the seller and thus is concerned with the best interest of her client, the seller. You are not her client, you are merely a customer. Think of the listing agent as a car salesperson. His fiduciary responsibility is to his employer, the car dealership, and he is going to try to sell cars for the most money possible thus bringing in the greatest profit to his employer.
If Ms. Listing Agent is showing you her client's home, and you mention that your wife told you she is going to divorce you if you don't buy this house, you better believe she is going to pass that information on to the seller. It is her responsibility to give her client, Mr. Seller, any information that will help him sell his house at the best terms possible.
On the other hand, Ms. Listing Agent is required by the rules of agency to keep important information about her client confidential. Any real estate agent in the state of North Carolina (and hopefully all other states as well) is bound by a code
of ethics and must be truthful when it comes to material facts about the
property no matter who she is representing, but she should not disclose her clients motivations. She is never going to tell you that he is willing to take 20% less than asking price and throw in the washer and dryer too.
And here is another surprising fact - every single other real estate agent is working for the seller too - not just Ms. Listing Agent. All of the other agents are considered seller's sub agents, and it is their duty to work on behalf of the seller's best interest as well. It used to be this was the only way real estate agents worked until someone decided it might be nice for the buyer to have some representation in the biggest financial deal she is likely to make in her entire life.
That is how we got something in North Carolina called Exclusive Buyers Agency. With this agreement which can be written or even oral until an offer is made at which time it must be written, the buyer is getting an agent to represent her interests in the deal. So if your buyer's agent finds out that the seller is willing to go 20% lower on the price, she is going to share that information with you her client.
Having a buyers agent is helpful in so many other ways. She can use the data available to her to come up with the best offer in terms of price and other considerations. She will negotiate with the sellers agent or the sellers directly if they do not have an agent. She will negotiate repairs and other due diligence issues, and in many other ways help you make it to closing as painlessly as possible.
Best of all, these services generally don't cost you a thing because the buyer's agent is paid out of the commission paid by the seller. Some people worry that a buyer's agent who is paid by the seller will not be loyal to them, but because of the rules of agency and the code of ethics, this situation really does work.
So I recommend you get a good buyer's agent on your side before you start looking at real estate and avoid all of the unpleasantness of that purchase I made without one.
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