Illinois is a "designated agency" state... the agent who is designated as working for YOU... works for YOU. Just because we work for the same agency does not mean that we share proprietary information.
Sorry this has turned into a discussion among agents of how this is handled in different states, but no one from Florida is participating. If you will share where you are thinking about purchasing property in Florida, I can recommend some good agents there.
If I have been working with a buyer and I list a home that is perfect for them, I tell them about it and remind them that the seller has hired me and I remind them of my fiduciary duties. Because we rarely work as buyers agents I have never had this situation arise with one of my own buyer clients. I also have a fiduciary duty to treat the buyer fairly--even though I may know what they can afford it doesn't mean they want to spend it all. Our buyers are pretty savvy, they don't disclose to me what they want to pay unless they are clients, and even then, it doesn't mean they want to pay that much for every house they see, just that one house. Most of my deals are cash, when I ask for proof of funds the buyer who is looking at a $600,000 house may show me a statement that says they have $900,000. That doesn't mean they want to pay the full $600,000.
In regard to how well the seller will be represented - basically, they hired me for my expertise, but more importantly, to get their home sold. If the buyer that comes along happens to be mine, so be it.
Just to clarify, I am not precluded from advising them as to how they should respond to the offer - I can counsel them to the best of my ability - I just CAN'T tell them that I know the buyer may come up in their offer or share any other personal information.....but as far as negotiating and offering suggestions on how to proceed, I can certainly do that. I can also strategize with the buyer, as long as I never share any information in regard to what the seller will accept.
It's a fine line to walk, but it can be done effectively. I personally prefer not to sell my own listings, but I will act professionally, and to the best of my ability if I am in that position. The idea of sending my buyer to a strange agent at another company at the most crucial point in their home finding search, is hard for me to understand. "In the best interests of the buyer and seller" is, to me, helping them reach a meeting of the minds....no one signs on the dotted line if they aren't satisfied with the terms.
Judy, same here in NJ - the laws in regard to sub-agency changed in the 90's - also, transactional brokerage is part of our CIS form, but it is not generally used.
JR - I am confused - did you mean that you can sell your own listing, and still be considered to be a seller's agent? What if you have already been working with that buyer, already know personal information , and then list a home that is perfect for them. What then? Can you still proceed with an offer if there is no dual agency agreement?
Ok I am being too long winded.........the nuances from state to state are interesting, too.
I personally try never to represent both sides, even though it is legal in Arkansas, since it can be very stressful if the transaction is a difficult one. One way to avoid this is to refer one side or the other to another agent. Another way is to have a written agreement with only one of the parties. If it is my listing, this ususally ends up being the seller.
In the latter case, I can write the offer and help the buyer, but I don't represent that buyer. I always offer the buyer the option of having his own agent. The Realtor code of ethics demands that we treat all parties fairly and honestly, and I try to do that.
That way the buyer is now aggressively and thoroughly represented. Yes, I know that as a disclosed dual agent I am allowed treat both sides fairly and equally, giving no edge to either side. And I suppose, for some, that can work. But that's not what my seller hired me for. They hired me to represent their interests and give them the benefit of my expertise. Much of that expertise is blocked from them, if I opt to be a dual agent. I cannot properly advise them on negotiation, or inspection issues. I'm reduced to "therapeutic" real estate" (ie: I don't know...what do YOU think we should do?).
The only person truly being well-represented in dual agency, in my opinion, is the agent. The buyer and the seller are getting only a part of me, and that's not what they were lead to believe when they hired me.
Although I did answer this Arkansas question, which may have bothered Judy, since she pointed out I am from NY, I did tell Msfeebz that I am from NY and hoped someone from Arkansas would answer. Too many times questions disappear from the first page if they aren't bumped up. I'm also of the opinion that long descriptions of agency cause a person's eyes to glaze over, which is why I keep my answers succinct.
It is interesting to me to see how this issue is treated from state to state.
Many years ago, in NJ, all agents were considered to be working for the seller.....that is NOT the case anymore. We do not all work for the seller, even though the seller is paying the commission.
When we begin working with a buyer or seller, we have them sign a state mandated Consumer Information Statement....( a CIS as it is called).......this states that as an agent I will be working with them either as a buyer's agent or sellers's agent, OR, as a disclosed dual agent IF the occasion arises. The "occasion arises" whenever we show a company listing, whether it be our personal listing or another agent's listing who works for the same company.
The duties of a disclosed dual agent are clearly spelled out. We can not put the rights of one party above the rights of the other party - everyone is treated equally. We can not run back to the seller and tell them something we learned about the buyer that might hurt the buyer's position. The same goes for information we may have in regard to the sellers. We cannot indicate that a seller will take less than the list price, nor can we indicate that a buyer will go higher than the offer that is on the table. Often, if I have an offer on my own listing, I may have my manager, or another agent sit in on negotiaitons, just to be another voice for one of the parties.
Rarely, if ever, is a separate agreement signed in regard to compensation, and the buyer is free to move on to another agent without formally "breaking" the agreement. We have no protection if they work with multiple agents. I believe there are some exclusive agency agreements where a minimum commission may be required, which the buyer would have to make up for, and is a more formal agreement, but they are rarely used in my area.
What confuses me the most is when agents in other states say it is best for the consumer to have a deisgnated buyer's agent. Oh, I understand the concept, but...... Do these agents not list properties??...do they only work with buyers??
If you list homes, you will most liikely get leads from advertising or the internet, or from anywhere, then what? Do these agents NOT show or sell their own listings or follow up with leads? If they don't want to work under dual agency, then what do they do with those leads?
I list a lot of homes, more than I sell, but I certainly work with both buyers and sellers. if I have been working with buyers for a length of time, and I then list a house that would work for them - of course I would show it to them, and hopefully sell it. What do agents in other states do in this situation if dual agency isn't an option?
On another thread, one suggested that you "refer"out that buyer if this situation occurs. To me, that is unbelievable.....to hand off a buyer I have been working with, and to tell them they should now work with a stranger in another company (because anyone in MY company is still a dual agent).
In NJ, we comfortably move from being either a buyer or seller's agent, or a disclosed dual agent. Do agents in other states just specialize in being one or the other?
As I said, it is interesting to see how business is conducted in other states.......maybe I should start a new thread on this........ although it isn't very exciting to write about ! ha
Msfeebs - please excuse my rambling - I an sure I bored you to death!
The way it works is the following: There are two "sides" to each real estate transaction, the "listing" side and the "selling" side. The listing agent is the agent/company that has the property for sale. The selling agent is the agent/company that actually sells the property. The listing and selling agent/company may be the same, if the listing agent or another agent who works for the listing company sells the property.
In many cases, it is an agent with a different company who sells the property. In that case, the listing agent/company normally pays the selling agent/company a part of the commission that the seller pays the listing agent/company.
Most realtors in the state of Arkansas use contracts from the Arkansas Realtor Associ ation. The listing agreement is actually with the agent's company, not the agent personally. Similarly a buyer who has a written buyer representation agreement has his agreement with the real estate company not the individual agent.
To answer your question, in Arkansas normally you do not have to pay extra to have a buyer agent. When the listing agent puts the property into the Multiple Listing Service (MLS) normally they state what percent commission they will pay a buyer agent. The seller will be paying the same commission whether his own agent sells the property or another agent does. The buyer agent is the selling agent, as described above. And if the listing agent sells the property, he or she gets both "sides" commission.
I work mostly as a buyer agent and feel that buyers need to have one. And if you want a buyer agent, you need to sign a buyer representation agreement. In Arkansas there are two different ones, the Exclusive Buyer Agency Contract and the Non-Exclusive Buyer Representation Agreement. The Exclusive has more "teeth" in that if you break the agreement, you may have to pay a fee. There is a procedure for ending the Exclusive agreement if you decide you don't like your buyer agent. The Non-Exclusive doesn't require such a fee and either side may cancel the agreement at any time. If you are loyal to your agent, this isn't important. Pick your agent carefully.
Usually a buyer agent accepts the fee that the listing agent is offering to the selling agent, unless it is a lot less than what is usual for them. So you probably won't have to pay an extra fee, unless your exclusive buyer agent agreement states that the agent's fee is minimum of X percent. Even in that case, the offer would be presented as including the agent's fee.