Buyer's Agency vs. Selling Agency What Are The Differences?
In Wisconsin, a real estate buyer can choose to work with either a selling agent (sometimes also referred to as a sub-agent or a co-broker agent) or a buyer’s agent. Either way, your agent is a trained professional, licensed by the state of Wisconsin, who is obligated by law to treat all parties to a real estate transaction fairly.
To understand how a buyer’s agent is different from selling agent, you must first understand how they are alike. All real estate agents owe the following duties to both buyers and sellers:
- Fair & Honest Treatment
- Disclosure of Material Adverse Facts
- Confidentiality
- Provision of Accurate Market
- Condition Information
- Reasonable Skill & Care
- Accounting
- Objective Presentation of Offers
HOW ARE SELLING AGENTS DIFFERENT?
Wisconsin law requires selling agents to treat all parties fairly, agents are not allowed to be adversarial for or against the seller or the buyer.
If you work with a selling agent, there is no contract between you and the agent, and you are not the agent’s principal. You will receive a Disclosure of Real Estate Agency form that lists the fair treatment duties owed by all agents to all parties, that will indicate that the agent is working as a selling agent. The agent will show you properties, provide information on properties, and draft the purchase contract as you direct.
The selling agent must provide you with information about any known or potential defects and help identify any situations where you should consult with a professional, such as a home inspector, contractor, attorney or accountant.
HOW ARE BUYER’S AGENTS DIFFERENT?
If you work with a buyer’s agent, you and the buyer’s agent sign a WB-36 Exclusive Buyer Agency Agreement that includes a Disclosure of Real Estate Agency. This disclosure lists the fair treatment duties owed by all agents to all as well as the duties owed to you as a principal client.
The buyer’s agent receives a fee when he or she successfully helps you find a property and will negotiate a purchase contract in accordance with your buyer agency agreement.
The buyer’s agent works for the interests of the buyer but also must know how to work with the listing agent so that the seller sells and the buyer buys. A buyer’s agent is not able to “force a seller into submission”. Acting in an adversarial way is not the most effective way to represent a buyer.
A buyer’s agent owes you the fair treatment duties owed to all parties plus the higher level of agent-client fiduciary duties including:
- Loyalty
- Disclosure
- Obedience
ONLY A BUYER’S AGENT CAN:
- Give a negative opinion or critique of a seller’s property beyond disclosing defects.
- Recommend or suggest an offering price or give you an opinion about whether a particular property is priced too low or too high.
- Structure the offer and draft offer provisions with the buyer’s best interest in mind.
- Recommend and assist the buyer with negotiation strategies for the best price and terms.
- Disclose all information and research about a property’s history and liens so the buyer can make an informed decision. The level of additional investigation and research that a buyer’s agent may do for a buyer may vary from agent to agent.
- Give advice within the scope of the agent’s expertise as a licensed real estate agent.
The decision to have either buyer or seller representation and how the representative is compensated should be something you discuss with your agent, and something that your agent is open and honest with you about.
Wisconsin has agency laws, and all agents represent the seller unless you ask for specific buyer representation. Your agent should discuss this freely with you so you understand how we get paid.
Most people work with us because of our reputation for fair and ethical client practices to all parties and for our willingness to be open and honest about all aspects of the real estate transaction.
Please ask any of our team members about the agency relationship. We will address your questions and provide you timely and accurate information.