Protecting the Buyer
Real estate services essentially consist of the following:
Providing information such as property data, zoning information, community statistics, financing sources, offering property value reports, negotiating assistance, advocacy and confidentiality. In the past, buyers have had some but not all of these services because agents have represented sellers.
Today, buyers can protect themselves by retaining buyer's agents and in some cases, attorneys. Buyer agents cannot, of course, give legal advice.
The main service that buyers typically are looking for is confidentiality. In the traditional real estate system, seller agents are legally responsible for disclosure of all buyer information to the seller to assist the seller in their decision making process. For example, if the seller's agent knows how high the buyer will go on a piece of property, that information must be disclosed to the seller.
A buyer's agent, on the other hand, maintains the buyer's confidentiality and will disclose only those facts that a buyer wants disclosed. It is illegal for a buyer's agent to violate the confidentiality of the buyer.
Types of Agencies
Buyer Agency: Agent represents buyer (the client). Buyer agents must use their skills to protect the buyer's interest, including negotiating in the buyer's favor.
Seller Agency: Agent represents seller (the client) but can assist buyer with information. By law, seller agents must use their skills to protect the seller's interest, including negotiating in the seller's favor. Seller agents include listing agents and their cooperating subagents.
Disclosed Dual Agency: Agent seeks permission to offer limited representational services to both buyer and seller on the same transaction. A disclosed dual agent ceases to be and advocate and cannot negotiate in favor of either party.
Buyer's agents generally don't add extra fees to the transaction. Their fee is usually built into the transaction in the way of a cooperating fee from the listing agent. The fee is disbursed at closing of the transaction with all other fees pertaining to the transaction. A competent buyer's agent should be able to save you money in terms of time, advice, and negotiating leverage.