When it comes down to the nitty gritty details of a real estate deal, how can you ensure that your interests are being properly represented? Understand the difference between Single Agency and Transaction Brokerage.
No, this is not the sexiest blog post about real estate you’ll ever read… But, if you’ll spend some time understanding what this means, and ensure that you’re properly represented. You could quite literally save yourself thousands upon thousands of dollars!
First things first, if you don’t sign anything that states you’re being represented as a single agent, then the assumed relationship is transaction brokerage.
In order to receive Single Agency representation – according to Florida Statutes Section 475.278(3)-(1)(b)
The disclosure must be made before, or at the time of, entering into a listing agreement or an agreement for representation or before the showing of property, whichever occurs first.
Point being… Get it in writing!
Ok, Next Question…
As you can see, the 4 benefits you receive with Single Agency that you don’t with Transaction Brokerage are:
If I represent you as a single agent, and we find the perfect house for you. When I call the listing agent to have a conversation about the property (before making an offer) they mention to me that the seller would like to, “just cover their mortgage and closing costs” with the sale. Since I am loyal to you, I’m going to pass that information along, as it will be very beneficial in beginning to assess what the owner is willing to take.
Now, if I were a Transaction Broker and that same situation occurred, the story would have a different ending. Reason being, according to the transaction brokerage agreement, “This limited confidentiality will prevent disclosure that the SELLER will accept a price less than the asking or listed price, that the BUYER will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property…” So, I am legally obligated not to share that information.
If you’re wondering why a real estate brokerage would not want to represent their buyers/sellers as a single agent, the reason is simple… Added liability and risk. With increased representation responsibilities comes increased risk.
The Single Agency commitment - the strongest level of representation. This allows us to best align with you and give you the comfort in knowing that we are on the same team.
IS YOUR REALTOR REPRESENTING YOU?
Whether you are ready to buy or sell a home, you need straight talk…and you can get it from the professionals at Berkshire Hathaway HomeServices Florida Network Realty.
One area of confusion for buyers and sellers is the role real estate licensees have in real estate negotiations. Most consumers do not understand how representation works and believe that their agent is looking out for their best interests, but that isn’t always the case. When real estate professionals work with buyers and sellers, “agency” relationships are established. There are three kinds of agency relationships that happen between a consumer and a brokerage firm during a real estate transaction: No Brokerage Agreement, Transaction Agency and Single Agency. Berkshire Hathaway HomeServices Florida Network Realty offers the highest degree of accountability: Single Agency.
No Brokerage Agreement
In a no brokerage agreement, the agent is simply handling the paperwork of the transaction and cannot represent or negotiate on behalf of the buyer or seller.
As a transaction broker, the agent provides limited representation. The buyer or seller is a customer of the agent and has given up his or her right to undivided loyalty of the licensee. In other words, transaction agency representatives represent the transaction with limited representation and limited confidentiality. The agent must stick to the facts of the transaction, unable to offer opinions that may make a big difference in a buyer or seller’s decision-making process. A transaction broker may not work to the detriment of either party in a real estate transaction, but conversely they cannot work to benefit either party. Most brokers have opted for this limited representation.
The highest degree of accountability comes with single agency. As a single agent, the broker has a fiduciary relationship and owes complete allegiance to the buyer or seller, who is then referred to as a principal or client. By law, the agent must work to achieve the best terms for their principal.
“Berkshire Hathaway HomeServices Florida Network Realty offers single agency representation, and our real estate professionals have a single goal – to create a win for the buyers and sellers we represent,” said Berkshire Hathaway HomeServices Florida Network Realty Founder, President and CEO Linda H. Sherrer. “Whether you are a buyer or seller, you want to work with a real estate professional who represents your best interests and not just the interest of the transaction during the real estate process.”
Working with a company that operates in a single agency capacity offers many benefits to both buyers and sellers. Single agency representatives provide the customer with full representation, loyalty and confidentiality, which can increase the success for the customer during the transaction. In other words, Realtors who are single agents work to best serve the interests of their client, not the transaction.
“Representing a buyer or seller involves far more than preparing an offer; it requires extensive market knowledge, research, negotiating, financing and follow-through that successfully moves the transaction to the closing table.” said Christy Budnick, executive vice president of residential real estate, Berkshire Hathaway HomeServices Florida Network Realty. “Buyers and sellers need someone representing their best interests throughout the entire transaction. That’s what we offer.”
There are times when Florida law does not allow a broker or Realtor to work in a single agent capacity. When the brokerage represents both sides of the transaction, the law requires the company to work as transaction agents. However, in this situation, nothing previously disclosed can be used to the detriment of either party.
Whether you are buying or selling, Berkshire Hathaway HomeServices Florida Network Realty will help you take advantage of the best opportunities in the market. If you need the services of a connected agent contact me today.