Do I Need Someone Representing Me in My Real Estate Purchase?

Who represents YOU in a Door County real estate purchase?  Sometimes agents represent the buyer, sometimes the seller.  You want to know who represents you, the buyer, in a real estate purchase.  Bear with me for a few paragraphs while I get to that. Seller’s receive representation when they enter into a listing contract with an agent and brokerage.  It may be important for you to know what services they receive  as you debate if you should have your own representation.

What is “Representation”?

A property seller becomes a client when they engage the professional services of a real estate agent.  The seller and the agent (on behalf of the brokerage) will sign a listing contract.  It becomes the agent’s job to protect the bests interest of the client (seller).

With execution of the listing contract the real estate agent goes to work for the seller, and when the job is complete (the property is sold) the real estate agent and their agency receive the commission agreed upon.  Throughout the term of the listing contract the real estate agent provides the seller with information on matters such as pricing the property, when an offer to purchase is fair, and how the offer to purchase should be structured to their advantage.

It’s a bit the same for buyer representation, except the commission (you don’t pay me a dime).

More About Representation

A property purchaser by default in Wisconsin is a customer.  The real estate agent provides services to the customer and is performing those services on behalf of the listing agent’s client (the seller).  There is no contract between you (the buyer) and the real estate agent.  An agent working with you will show you the properties you are interested in, gather information on those properties, and draft the offer to purchase as you direct it.  When you are a customer the agent’s loyalty remains with the seller—to get them the best terms and price for the property.

In this arrangement, you as a customer, the agent may not provide you with any opinion or advice that is contrary to the best interests of the seller.  The agent cannot advise you on the price to offer for a property or what terms you might include in the offer to purchase.

Confusing? Yes. Why?

We real estate agents didn’t just make this up!

Wisconsin law dictates these forms of agency (a client or a customer) so it is important for you as a buyer to understand who the agent you choose to work with is working for.  A real estate agent must provide you with an explanation of agency.

Confusing, yes.  But it isn’t all bad.  This does provide some protection for both the seller and the buyer.

What Do You Owe Me as a Customer? As a Client?

As a customer you are entitled to fair and honest treatment.  An agent must give you information on any known defects in the property and may suggest that you consult with a professional, such as a home inspector or roofing contractor to help you evaluate the condition of a property, an attorney to advise you on any legal matters, or an accountant to advise you on tax matters.

Whether a client or customer, all parties are entitled to certain duties owed by the real estate agents.  Those are:

—Fair and honest treatment
—Disclosure of adverse facts
—Confidentiality
—Provision of accurate market condition information
—Reasonable skill and care
—Accounting (such as for earnest money deposits)
—Objective presentation of offers

Were we to take that next step and enter into what is called a buyer agency agreement, an agreement where the real estate agent represents you, then you would receive from the agent you are working with all those same treatments due to a client:

—Loyalty
—Advice
—Disclosure
—Obedience
—Negotiation

and

—Fair and honest treatment
—Disclosure of adverse facts
—Confidentiality
—Provision of accurate market condition information
—Reasonable skill and care
—Accounting (such as for earnest money deposits)
—Objective presentation of offers

If You Represent Me What Do You Do?

If we decide to work together and I represent you, then I’m representing you and my mission is pretty straightforward:

I negotiate in your best interest—for the best price and terms.
I can provide you with advice on offering price.
I can provide you with advice on terms for an offer to purchase.
I can tell you everything I know about a property, even if it not considered an adverse fact.

You (they buyer) Don’t Pay Me (the real estate agent A Dime

There really isn’t a downside for you in a buyer agency agreement.  You do not have to pay me for services in a buyer agency agreement, and you can cancel the agreement at any time.

Who does pay me for services?  The seller.

So the question becomes: Why would you want me to represent you if you aren’t the one paying me?

Because that’s my responsibility…my fiduciary duty under a buyer agency agreement.

In the Door County real estate market it is customary for the seller to pay the commissions, even though the buyer’s agent is representing the buyer’s interest, not their’s (the seller).

One exception to that may be if you purchase a For Sale by Owner Property.  We’ll discuss that at another time.

The Buyer’s Agency Representation Agreement

Do you ever long for the days that business could be done on a handshake?  Do you even remember those days!!  For the most part they do not exist any longer.

If you do want me to represent you, before we go out to view homes we’ll need to sign a “buyer’s agency agreement”

We will meet in my office to review the paperwork.  If we plan our first face-to-face meeting at a property then we’ll talk on the phone to review the buyer’s agency agreement and I’ll have you sign it electronically.

As questions or concerns arise, just ask, I am at your service to clarify anything you want.

You might ask, “What if things aren’t working out between us?”.  My friend Mary explains this perfectly, she says we’re not getting married, we’re just going steady and can break up anytime. So, you see, we can cancel the buyer agency agreement at any time.

If you would like a copy of the Wisconsin Buyer’s Agency agreement, email me here and ask for one.  I’ll send it right away.

Check back for Chapter 3 tomorrow!

Your real estate agent is the best source of information about the local community and real estate topics. Give Lisa Bieri a call today at 920-493-5472 to learn more about local areas, discuss selling a house, or tour available homes for sale.

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The Ultimate Door County Home Buyer’s Guide - Agency - Chapter 2
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The Ultimate Door County Home Buyer’s Guide - Agency - Chapter 2
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Who represents YOU in a Door County real estate purchase?  Sometimes agents represent the buyer, sometimes the seller.  You want to know who represents you, the buyer, in a real estate purchase.  Bear with me for a few paragraphs while I get to that.  Seller's receive representation when they enter into a listing contract with an agent and brokerage.  It may be important for you to know what services they receive  as you debate if you should have your own representation.
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Lisa Bieri & Associates at Door County Realty Inc.
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