As a home buyer, you might reasonably assume that you are a client of your real estate agent, entitled to specific services and guidance. However, unless you are a buyer-client of an�EXCLUSIVE BUYER AGENT�or�EXCLUSIVE BUYER BROKER, this may not be the case!
In fact, even home sellers are not necessarily �clients� of their real estate agents, depending on applicable state law. This is because �transaction brokerage� is growing more common in the real estate industry. The net effect is a reduction of liability for agents, but reduced service and protection to consumers.
At present, 25 states allow transaction brokerage, and South Carolina will allow it as of 2017. In some states, like Florida, transaction brokerage has completely replaced�DUAL AGENCY.
In Colorado, a transaction broker is the�default role�of an agent or broker. Per Colorado state law, a home buyer must obtain a written agreement from a transaction agent if they wish to have an actual buyer�s agent represent them! Without that agreement, your agent or broker is simply a facilitator in the process, not your representative.
In Florida,�STATUTE 475.278�actually states, �It shall be presumed that all licensees (real estate agents or brokers) are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.� It goes on to say, �A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent.� Even worse for home buyers, the statute only requires �limited confidentiality.� Like Colorado, unless a home buyer has an agency agreement in writing with their agent, their agent or broker is simply a facilitator in the process and not representing them.
Do not be discouraged by this layer of red tape � you have the right to be professionally represented in a real estate transaction and generally, it costs no more. More service and protection for the same price!
This is critical for�HOME BUYERS�to understand. In transaction brokerage, the agent or broker does not represent either the buyer�or�the seller, but instead acts as a neutral facilitator between the parties.
Transaction brokerages typically cannot be held responsible for anything other than providing basic information and forms. Because a transaction brokerage does not provide advice or representation to either party, they enjoy reduced liability for errors, omissions and other failures to perform.
A transaction broker represents the�transaction. Not the people. Hence, transaction brokerages refer to home buyers and sellers as �customers� - as if you were buying or selling a basic commodity, instead of something as complex and expensive as a home!
In contrast, the word �client� conveys a host of fiduciary duties, which transaction brokerages do�not�provide.
When you use a NAEBA member, both the licensee and their company have a fiduciary relationship with you as a buyer-client.�A fiduciary duty is the highest legal duty an agent can have with their client. It requires the agent to put the client�s best interests first. At NAEBA, our�CODE OF ETHICS�includes the following duties:
� Loyalty
� Obedience
� Confidentiality
� Accounting
� Reasonable skill and care
� Disclosure
This level of protection and dedication is not available under transaction brokerage!
What�s more, by the virtue of their fiduciary relationship with the home buyer, Exclusive Buyer Agents�will disclose to the buyer�information that materially affects a buyer�s best interests, even if that information is detrimental to the seller!
Do not settle for being a �customer� of a transaction brokerage, or of a dual agency that has an inherent conflict of interest. Instead, protect yourself by becoming the buyer-client of a NAEBA member!�FIND AN EXCLUSIVE BUYER AGENT IN YOUR AREA TODAY!