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Important Terms Concerning Representation

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There are some definite advantages to working with a buyers agent. A buyers agent can potentially save a buyer a lot of money. In a strong sellers' market, it can also make a difference as to whether a buyer can get the house that they want. This normally requires the buyer to make a commitment to work with one agent.

When any agent in Maryland or Pennsylvania first meets with a buyer, the law requires the agent to explain to the buyer their options for representation. In most cases the buyer can choose any option. Generally, the only exception will be when the buyer wants to purchase the agent's own listing, in which case, the buyer's options are more limited.

The buyer's basic choice can be grouped into two categories, seller agency and buyer agency, although from a legal perspective the buyer has multiple choices. Under seller agency, the agent they are working with is completely obligated to the seller, EVEN IF THEY ARE ONLY WORKING WITH THE BUYER. This means the buyer will receive assistance from the agent, but no help in negotiations. The buyer should also be very careful with what they say. If, for example, the buyer tells the seller's agent that they are willing to pay more for the house, the agent is obligated by law to pass that information on to the seller.

Under buyer agency, the agent is obligated to look out for the buyer. This means the agent can help the buyer in their negotiations and would keep the buyer's personal and negotiating information confidential. To get the full benefits that go along with buyer agency, the buyer must sign a buyer agency contract.

In Maryland, buyer representation is presumed as soon as the agent first meets with the buyer, even though no contract has been signed. This is a very limited form of buyer representation. The main benefit the buyer receives is confidentiality for any statement they make that affects negotiations, even if later on the buyer chooses seller agency. Either the buyer or the agent can end presumed agency at any time just by saying so, and it must end if the buyer wants to put in an offer on any property.

To fully understand all of their options, the buyer should first meet with the agent at the office. This is an opportunity for the agent to carefully explain the required agency disclosures and for the buyer to determine what's best for them.

  Doug Barry
  LONG & FOSTER REAL ESTATE, INC.

  Direct 410-207-4751
  Office 410-583-5700
  Doug@RealtyComplete.com