What is a real estate agent? | Columns

One of the most misused words in English is “agent”. Have you ever heard the phrase “He’s my insurance agent?” Well guess what. He is not; he represents the insurance company, not you. So what exactly is an agent. An agent is a natural person who has a duty of fidelity and loyalty to a person or entity. He is a fiduciary or an agent. This person or entity is a customer, not a customer. An agent must put the client’s interest before his own. Having given this explanation, let’s now talk about the types of agencies that exist in the real estate profession, in the state of Texas.

Texas real estate law recognizes two types of agency: the seller’s agency and the buyer’s agency. When an individual puts his house up for sale with a real estate company, the latter becomes the seller’s fiduciary. This means that the agent must do the best job possible for the seller. He must strive to obtain the best price for the seller and he must advise the seller on the best way to negotiate with a potential buyer. The agent should advise the seller on the best price to list their home and not on a higher price just to have a better chance of getting the listing. The agent should also advise the seller to be completely candid when it comes to disclosing known defects in the property. Concealment of defects may result in civil action and treble damages. An agent representing a seller will never disclose to a potential buyer that the seller will accept less money than the property is listed. A seller may allow the agent to let a prospect know that the seller is negotiable, but this will immediately result in a lower first offer. It’s best not to let a buyer know that a seller is negotiable.

When a potential buyer is ready to begin their property search, they need to find a licensee (an agent) who can represent their best interests. When an agent represents a buyer, their job is to help the buyer negotiate the purchase of a property. An agent could possibly tell a buyer that a property is way too expensive. If the buyer reduces his offer based on the advice of the agent, the agent makes a smaller commission, but this amounts to putting the interests of the buyer-client above his own. There are also rare occasions where an agent may even tell a buyer that a property is undervalued and that if the buyer doesn’t offer more money, another buyer might outbid them. If a buyer wants to be properly represented, he must use the services of a brokerage that does not represent the seller, namely the listing broker. If I have a buyer who comes to my office who has an interest in one of my company’s listings, I must disclose to them that I represent the seller and cannot provide any negotiation assistance to the buyer. . Although it may cost me money in commission, I will tell the buyer that if he feels he really needs help negotiating the purchase, he should speak to a real estate broker who can represent it.

Texas law allows for a practice called “intermediary.” which allows a licensee to work with both buyer and seller. Unfortunately, this practice does not allow the licensee to ensure the best interests of the buyer or the seller. A broker can appoint a licensee to work with both buyer and seller, but all he can do is pass information from one party to the other; it cannot give any meaningful direction to either party. There is another type of intermediary where the broker can appoint a licensee to work with the seller and another to work with the buyer. The law stipulates that, in this case, the licensee can give “opinions and advice” to the buyer or seller to whom he is assigned. The law does not define opinions and advice. Does this mean that the licensee assigned to the buyer can say: “The seller must sell; he is about to be seized.

The bottom line is this: if you are signing a Listing Agreement to sell your property, or if you are signing a Buyer Representation Agreement, do not check the “Intermediate Status” box; check the “No intermediate state” box. By doing this, you will still have the agent who listed you obligated to only represent you. Just to give some perspective, lawyers are not allowed to work with opposing parties in a legal transaction. One of the parties must acknowledge that it will not receive any representation. The main goal of the middleman is to keep both sides of the commission under one roof, and this is always at the expense of both buyer and seller. An attorney for the Texas Association of Realtors® defined the middleman as a “legal fiction.”

Mike McEwen has 32 years of experience in the real estate profession.

About Wanda G. Warren

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