Understanding Buyer Representation in Houston, Texas

To understand the benefits of using a buyer's agent you first need to understand the role and obligations, in the eyes of the law, of the listing agent and any subagent of the seller. Sellers list their homes with a real estate agent to assure professional representation throughout the home selling process and to get the best terms and price in the sale. A subagent of the seller is an agent "working with the buyer" but not representing the buyer. A subagent has the same obligations to the seller as the listing agent even though he is with, and provides services to, the buyer. Both the listing agent's and subagent's fiduciary duties to the seller include these important client level services:

• Provide undivided loyalty to the seller, not to the buyer.
• Maintain confidentiality of seller's bargaining position.
• Act as an advocate for the seller, not the buyer.
• Provide full disclosure of information about, and intentions of, the buyer (even intentions the buyer may deem confidential).
• Provide price counseling for the seller's best interest.
• Help negotiate to get the seller the best price.

Role of a Buyer's Agent
A buyer cannot obtain the above client level services from the agent who lists a home or even a subagent of the seller who may be "showing properties to the buyer." This is because the agent who lists a home and a subagent must represent the seller's interests. The listing agent or a subagent can provide only customer level services to a buyer. So, the buyer's option is to (a) work with the listing agent or a subagent or (b) enlist the services of a buyer's agent. The following table illustrates and summarizes resulting possible outcomes in this very important choice by the consumer.

So, is your agent working for you or for the seller? As a buyer you can get only customer level services from the agent who lists real estate or a subagent of the seller. If you, the buyer, want the full gamut of client level services you should seek the help of a buyer's agent. The buyer's agent is obligated to do the following:

• Work for the buyer's interests instead of the seller's interests. Act as an advocate for the buyer.
• Provide full disclosure about the property to the buyer, not just material fact.
• Remain confidential about the buyer's financial and bargaining position.
• Give the buyer objective opinion about why he should or should not buy a particular property. Point out both strengths and weaknesses of properties.
• Supply market information to support the buyer's offer, not the seller's asking price. Help the buyer negotiate the best price and best terms for the buyer's situation.

Some buyers believe they receive these client level services without enlisting a buyer's agent, e.g., from a subagent of the seller or even the listing agent. Buyers with this impression should realize that this cannot occur without the agent violating his fiduciary duty to the seller, thus jeopardizing his legal relationship with both parties.

Always. But enlisting the services of a buyer's agent is especially important in three situations. The first is when the buyer is purchasing in an unfamiliar market: out-of-town, out-of-state, or international sales. These buyers need objective opinion about where to buy and what to buy, regardless of how experienced they may be in purchasing real estate.

The second is relocation buyers. People changing jobs and moving often have little time to look for a home and must buy quickly. They need the objective representation from a buyer's agent.

The third situation is the first-time home buyer. First-time home buyers usually need more help than any other buyers simply because they have never experienced the complex process before. They need advice and counseling with every aspect of home purchase.

Another situation in which it's important to use a buyer's agent is anytime you would like to have an advocate on your side looking out for your best interests.

When seeking a buyer's agent look for the designation ABR®, Accredited Buyer's Representative. The ABR®, designation is the benchmark of excellence in buyer representation. This coveted designation is awarded to real estate practitioners by the Real Estate Buyer's Agent Council (REBAC) who met the specified educational and practical experience criteria. The criteria are:

• Completed the comprehensive REBAC course in buyer representation.
• Successfully passed a written examination in buyer representation.
• Demonstrated a practical experience of having completed five closed real estate transactions in the field of buyer representation.
• Received recommendations from two of the real estate practitioner's buyer clients.
• Be a member in good standing with the National Association of Realtors.®

Look for those real estate agents that proudly display the ABR® designation and know that they are professionals in the field of buyer representation.