Andreas, Home Buyer in San Francisco, CA

Can you explain the difference between a broker, and agent and a realtor? Who represents a buyers interests?

Asked by Andreas, San Francisco, CA Thu May 15, 2008

I want to start the process of looking for a house to buy. As a first step I want to find an agent who will contractually represent my interests as a buyer, above the interests of sellers. Am I looking for a broker, a realtor, and agent? What is the difference? Is there a specific type of contract that I can have to protect my interests?

Please don't offer me specific names or pitch for the job. I will write a follow up question asking for references. Right now I need to understand what type of agent I should be looking for!

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Answers

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Ashok 'Shoookie' Singh’s answer
You should be looking for a Buyers Agent, the buyers agents fiduciary duty are to you the buyer. ANY Realtor can be a buyer's agent, or seller's agent. It depends on what capacity you choose to work with them in. Any buyers agent worht thier weight will present you with a buyers agent contract, the long and short of what this does is say that you will work with "Agent X" for a specified period of time in contamplation of purchasing a property and what you will pay (most of the time this is paid by the seller). Most Broker's will also have an addendum of some sort which will delineate exactly what to expect from the agent representing you as a buyer.
Web Reference: http://www.shoookie.com
1 vote Thank Flag Link Sat May 24, 2008
BEST ANSWER
A real estate broker has a license allowing him or her to open their own office. A real estate agent or salesperson cannot open their own office, they must work for someone with a broker's license. In order for an agent to get a brokers license they must pass the brokers exam after a certain number of years as an agent.
Only a broker or an agent who is a member of the National Association or Realtors (NAR) can be called a Realtor.

All of the above can represent you as a buyer's agent. It doesn't matter to you whether a buyer's agent is a broker an agent or a Realtor. You can be an agent with 25 years of experience working for a broker with 10 years experience. Some who have a brokers license have no interest in opening their own office.

In searching for a buyer's agent to represent you, Look for someone who does business in the city or town you want to buy a home in. They will know the little details like which areas of the town have a high water table, building permits that have been approved near your house, the personality of the city departments. If you're contemplating heavy renovations or zoning use changes, you want to know how hard it'll be to get that done. Are there major city or state projects planned that will affect the value of the home you buy?

A local agent or brokers who's worked in that town for many years is more likely to treat you right since they'll want repeat business from you.


Finally, a long time local broker or agent will know more things about the owners of the homes that are on the market than an agent that doesn't do a lot of business in that town. They may remember the last time a home was on the market. They may have shown a home you like to another one of their buyers and failed to put a deal together. They may have tried and failed to get a listing that you're interested in. They may know what's underneath the vinyl or aluminum siding. They may even know things about the home the current owners may not know. When you sit down and compare the home you like with recent sales, a local real estate person has most likely been inside the comparables!

If you're buying a multi-family home, also look for an agent who owns one. They can be a great source of tips on choosing the best rental locations and tenants.

I'm biased toward full-time real estate professionals over part-timers. If there's a very well priced home that you like and you think it'll sell fast, you don't want your buyer-agent working their "real job".

Sign a contract that specifies what cities or towns your agent will represent you in, and how your agent will conduct a search of properties. If you're looking in different towns with different buyer agents, this will save duplication of effort and commissions due.
1 vote Thank Flag Link Thu May 15, 2008
Andreas,

Good to hear from you again. The word Realtor is trademarked by the National Association of Realtors (NAR). To be able to use that word, you have to be a member of NAR. It's a control thing, no way around it.

Brokers typically are the business owner of a real estate firm, and brokers often have agents working for them. Any contract you sign for buyer representation will be between you and the broker, even if the broker assigns an agent to work for you.

Many, many brokers and agents are members of NAR, and are thus technically allowed to use the word Realtor in their advertising. That doesn't mean that brokers and agents who aren't members of NAR are a bad thing. In fact, I'd be curious how they are able to get access to all the MLS data without being NAR members...another control thing from NAR...as in nearly every case to be a member of NAR, you have to be a member of the state association of realtors, and you have to be a member of a local board of...you guessed it...Realtors. Big club, lots of players.

I'm biased, so take this with that in mind. Read up on Exclusive Buyer Agents. Check out the Newsweek article at:

http://www.newsweek.com/id/33196

Go to the NAEBA website at:

http://www.naeba.com

for more good info.

Good stuff, great representation for buyers, no conflicts of interest.

Good luck,

Jeffrey
1 vote Thank Flag Link Mon May 19, 2008
Andreas about 70 to 80% of the deals in New York are done through a co-broke, the rest are direct sales where a Listing broker brings in a buyer to their exclusive property and closes on the sale in return recieving the entire commission, which is very normal and common.
I think you may be stressing this a little too much, it's less complicated than it all sounds. In New York, at-least in the City and even Brooklyn most agents don't ever sign any contracts with a buyer to represent them. # 1 there is no law that they have to sign anything. By you both agreeing to work together makes it a verbal contract, and assuming you are a motivated buyer who has been pre-qualified already it would be in the brokers best interest to work with you to find you a home. If you find a broker who is not trying to pre-qualify you, I suggest you work with another. What alot of experienced brokers who now a days, and it's happening more and more now is that they make up their own Buyers Agreement Contract for one simple reason, many buyers are not loyal, they try to work with 2 or 3 brokers thinking that each will show them something magical, so in order for a broker to protect them selves and not waste any time they have buyers sign an agreement.
Forget the terms Broker, Realtor, Agent for now, they are all pretty much the same to you, as long as you feel comfortable with a broker and find them to be knowledable enough or find you all the answers you seek thats all you should concentrate on. Make sure they listen to your needs and wants and ask you all the right questions. If you are looking to buy a year from now, it would probably be tough for a broker to sign any agreement with you, if you are motivated now and can put in an offer on a home in the next 30 to 60 days if you were to find exactly what you seek, than you can absolutely ask for a contract.
As far as I'm concerned there are no specific contracts, each firm will probably have a variation of one, or the legal can write one up for them if it's demanded.
Think of it this way, when a broker is working with you to buy a property, it's their job to get you the best deal that they possibly can, if there is room for negotiation. And a respectable broker wont try to pull one on you for two simple reasons, they are doing their job the way they should be in your best interest and they will want repeat business from you in the future.


Good Luck, and get pre-qualified with a Mortgage Broker if you haven't yet. I seen many people who think they can afford a million dollar homes, put in an offer and get rejected for having weak financials.
1 vote Thank Flag Link Mon May 19, 2008
Andreas,

The designation of "Buyer's Agent" is too loosely used to say that they only represent buyers. I have seen buyer's agents who also take listings. In the end what you want has nothing to do with whether or not the agent represents buyers only, buyers and sellers, or sellers. What you need is an agent you trust, who is under contract with you to represent your interests, and has proven to do so in the past.

But then that's the rub isn't it, finding someone who fits the bill. While I am currently an Exclusive Buyer's Agent, which is unique in that we operate under the National Association of Exclusive Buyer's Agents (NAEBA) and we're commited to never take listings, even having the designation as an EBA does not mean that one "fits the bill" of representing your best interests.

Your best source is to talk with friends who have used an agent that they believe, regardless of the circumstances, represented their best interests, all the time. Again, even though I am currently an EBA, any agent who has integrity, and has proven it to people you know, should be able to help you.

Some things you can consider inquiring about: Select an agent that does not do Dual Agency (a.k.a. Intermediary Status) under any circumstances. Dual Agency is similar to the same law firm representing both the prosecution and the defense - it's simply a bad idea and it should almost never happen. Select an agent that has experience in the area and in the type of property you're interested in. Similar to a lawyer, ask for the agent's past 10 clients contact info (this is different than asking for just any 10 clients). You want to know how their recent performance has been.

When you find the right agent, enter into a buyer representation agreement so that both your and the agent's responsibilities are clearly defined. And be sure the agreement can be cancelled at any time.

Hope this was helpful,

Jeffrey
1 vote Thank Flag Link Thu May 15, 2008
Andreas,

Concerning your dual agency question about Buyers Agents also listing properties for sale and if this is a conflict of interest. (The difference between a Broker, Realtor, Real Estate Agent seems to have been answered already.)

Some states allow "Dual Agency" such as In Illinois and Nevada (I'm licensed in both states) where one agent can represent both sides in the transaction with your complete consent (disclosure) and Permission. If you are uncomfortable with this, you can specifically not consent to it. (The other party has to allow it also.)

If your Buyers Agent shows you properties that they have listed for sale and represents the seller, (If New York state licensing laws permit dual agency) I would assume that they have to disclose this to you from the beginning and explain the situation to you and what it means..

The procedures are pretty much the same for Illinois/Nevada with a slight variation in the actual disclosure -- I assume the procedure is not too different for other states that do allow it.

Could it create a conflict of interest? ... we do them and we've never had a problem but there are a lot of responsiblities involved. (The liability skyrockets in this type of transaction and some brokerages won't even allow their agents to do them even though the state licensing laws allow it.)

You'll need to understand that if you want to purchase a property that your buyers agent has listed, that their first responsibility will be to the seller and confidential information known about the seller is not to be shared with you... (this should never be done anyways.. ever..)

Basically, the seller would be the client and you would be the customer in this type of transaction... It still means you must be treated with absolute fairness with a high level of ethics but once again... the seller of the property receives priority.... but it does not mean take advantage of the buyer...

For buyers brokerage agreements -- we use them and they are exclusive. Your benefit, (our clients anyways) is you receive priority over all the other buyers not under contract asking questions, wanting searches done, they can call at 1 A.M. with a question keeping them up all night, etc...

Whatever you want (our clients under a Buyer Agency Agreement) is first priority on the "to do" list and it also means doing more specific research on properties and providing opinions of value.

We are much more loyal to the buyer that commits to an Exclusive Buyer Agreement and that's just been learned from experience. A really good buyers agent not begging for business is going to want the same which should tell you something about their level of expertise.

If I was looking to buy real estate in another state, there is no doubt in my mind that the first agent I would be more likely to use is the one that requires a Buyers Agency contract in place. It just tells me right up front that they have the confidence and experience to ask for it... meaning they have better things to do then possibly working for free.

Hope that helps answer your conflict of interest and buyers agency question...
1 vote Thank Flag Link Thu May 15, 2008
Andreas,
A buyers broker is a licensed real estate agent who has declared to represent only the buyer in a transaction. The buyer is then commited (by contract) to pay the so called buyers agent. There are specific contract to hire a buyers broker. I can email you a standard agreement to review. Not to pitch the job, only for review. This space is too limited to copy and paste.
In most cases the buyers agent will be paid by the seller at closing, but with a contract you can assume the agent is solely working for you and in your best interest.
1 vote Thank Flag Link Thu May 15, 2008
A realtor is a licensed Real Estate Agent who is a member of the National,State and Local Board of Realtors, the largest professional Trade group in the United states. An Agent is anyone who is licensed by your state Licensure Department. They may be a salesperson or a Broker. Depending on the state licensure laws. A person that is legally a Broker has a higher level license and more expierence. A principal Broker is the person in an office that supervises all the agents in that office.

An Agent that is Contractually obligated to represent a Buyers interest is any agent that you sign an exclusive Buyer Broker ageement to represent solely you in a real estate transaction. Your state licensure laws will govern what your obligations and the obligations of the agent. Beware that once you sign such an agreement you may be obligated to use that agent even if some other agent may also assist you. Basically you agree to only use that agent.

Hope that clarifys the name game and the Buyer Broker aagreement in the real estate business.
Mike Davis, Principal Broker
1 vote Thank Flag Link Thu May 15, 2008
Andreas -- In some states all agents are required to hand out a "Consumer Notice" to potential consumers of real estate services and this notice explains different types of agency allowed by law in that particular state. You could go to appropriate web site for Consumer Protection Agency (for Real Estate Commission) in your state and see what information might be available for consumers of real estate services in your state. In PA we are required by the state to have the consumer acknowledge (by signing) the Consumer Notice and we must keep it in a file for the occasion of having had any communication with a consumer. In any printed form that our office has used (usually forms printed under the auspices of a "Realtor" Association) there will be a statement in the "boilerplate" (standard print) of that form saying something to the effect of "if you have any questions about what this contract or agreement means or do not understand it, please consult an attorney." So, I think, that the bottom line here is that if you have any doubts or concerns, it is wise to at least to think about that possibility (and you may want to have an attorney to possibly be in the background of serious transaction of sale contract to purchase real estate), but generally all aspects of "representation" (or "agency ") are agreed to in writing (or definitely should be) between the parties to any agreement and should be clearly understood (even if you need extra time to study the forms and ask any questions).
0 votes Thank Flag Link Sun Aug 25, 2013
Hi - I am Annabelle Dilworth and just answered question about difference between meaning of the terms agent, broker and Realtor and I just wanted to state that I am not a home buyer from Brooklyn, N.Y., but am actually a PA. State licensed real estate broker and Realtor member of local Board of Realtors in Philadelphia, PA ----- well this year I am a "Realtor" --- I haven't actually been a dues paying member every year, but I do believe that the National Association of Realtors has contributed a great deal of the effort that has gone into making the practice of brokerage (or "agency") in the real estate industry into what can truly now be called a "profession," (or close to it), and this also includes the State certification for different aspects of the practice of real estate appraisal (which the Federal government has attempted to totally separate from all other aspects of "real estate").
0 votes Thank Flag Link Sun Aug 25, 2013
The word agent can be applied to a sales person (person holding a state issued license as a real estate sales person), or a real estate broker (person who has passed state exam in order to obtain a state license as a real estate broker). In most states a sales person can be eligible after obtaining defined and documented amount of real estate industry experience and required hours of educational credit to take exam to become a broker (as opposed to sales person which also requires passing an exam). Usually the minimum time required to work in the real estate industry before being allowed to take exam for broker's license is 3 years. Every real estate office is actually headed up by a broker of record who is responsible to see thar all agents whether they are licensed real estate sales people or associate real estate brokers comply with all state real estate laws and regulations and that the brokerage office also complies. Most agents work for real estate brokerage companies, but the individual who is broker of record (known by the states as the "employing" broker or broker "of record") is the person legally libel for actions & compliance of all agents who represent the "brokerage" company. "Realtor" is a trademarked name for the trade organization, National Assocition of Realtors, which grants real estate licensees the privilege of using the term "Realtor" when they join & pay dues.
0 votes Thank Flag Link Sun Aug 25, 2013
Feel free to call Doug Meyer at Bergen Basin Realty at 718-763-4110 for any questions you have for Brooklyn homes, Condos, and Co-Ops. We specialize in the areas of Mill Basin, Old Mill Basin, Bergen Beach, Marine Park, Madison, Sheepshead Bay, Gravesend, Homecreast and more. Check out our website for listings, details, and pictures.

Bergen Basin Realty
5817 Ave N
Brooklyn, NY 11234
718-763-4110
0 votes Thank Flag Link Thu May 19, 2011
You might be able to find some more answers at the WOMENS COUNCIL OF REALTORS - Brooklyn Chapter's Website http://www.wcrbc.com
Web Reference: http://www.wcrbc.com
0 votes Thank Flag Link Mon May 16, 2011
This question is now three years old and much has happened in those three years. The answers about agents, brokers and Realtors are on the mark, but state requirements change. The most important thing here though, after complete generalities, is that the questioner is writing from Brooklyn OHIO, south and a little west of Cleveland, not Brooklyn NEW YORK, across the East River from Manhattan! Answers specific to New York State are not really relevant.
0 votes Thank Flag Link Fri May 13, 2011
Andreas, I should add: if you're looking for a property with 4 or more families, such properties are exempt from the disclosure. Single family or duplex (triplex?) all apply- make sure that you receive the agency disclosure.
Web Reference: http://optionsrealty.com
0 votes Thank Flag Link Thu Jul 17, 2008
In Texas, a licensed broker has more education and a different test to take than an agent. Agents have to be licensed and HAVE to be spnsored by a broker. Simply put that's the difference
0 votes Thank Flag Link Thu Jul 17, 2008
That was "substantive"- typo
Web Reference: http://optionsrealty.com
0 votes Thank Flag Link Thu Jul 17, 2008
New York State has a required disclosure form that details what you can expect from an agent that is involved in your transaction. Any real estate agent that promotes "ignoring" this fact is likely operating outside of this requirement. In real estate, verbal means little to nothing. The following link offers the disclosure that is required:https://www.mlsli.com/ro/dod/215.pdf
Please note: this is not a function of the National Association of Realtors, or any real estate company, this is required by the New York Department of State, in order to offer consumers protection and comprehension at the first substanive contact with a real estate agent.
Web Reference: http://optionsrealty.com
0 votes Thank Flag Link Thu Jul 17, 2008
To find the answers to your question you can visit the website of the New York Buyers Broker Association at http://www.NYSBBA.com
0 votes Thank Flag Link Mon May 19, 2008
If a buyer's broker also lists properties for sellers isn't that a conflict of interest? Can I really trust a buyer's agent if they list properties? Is a buyer's agreement exclusive (ie do I commit to one agent exclusively)?
0 votes Thank Flag Link Thu May 15, 2008
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