If you are thinking of buying a new home, it is in your best interest to know the difference between seller, buyer and dual real estate agents. Using the wrong style of agent could affect the financial terms of the deal and have material legal implications. Read on to arm yourself with an understanding of the difference and how to use it to your advantage when buying a home.



There has been frequent discussions over the past couple of years about buyer's agents and seller's agents. Real estate law now obligates an agent to indicate who they are representing. This is normally done when you first meet with an agent through a written disclosure document that you must sign that identifies whether the agent is working for the buyer or seller. A seller's agents represent the seller. Most real estate agents who show and market houses are seller's agents. They may be friendly to you as a potential buyer, show you multiple homes and help you prepare an offer on a home. However, the agent is typically working for the seller and looking out for the interests of the seller. On the other hand, buyer's agents actually work for the buyer and have an obligation to look out for the interests of the buyer. There are also dual agents, but we'll come back to that in a moment.

More often than not, this has little to do with who actually pays the agent. So, why does it matter? If you are the buyer, it is important for you to use a buyer agent because of the financial, legal and ethical implications. A seller's agent has a fiduciary alignment to the seller not to you as the buyer. Accordingly,during the negotiations a seller's agent will be aligned with the seller. Here's a real life case in point to help clarify. Suppose an agent realizes that the seller must relocate for a new job, has become highly motivated and is now willing to accept $25,000 under the home's list price. If the agent is a buyer's agent - working for you - he/she will be obligated and very likely excited to tell you this information. However, if the agent is the seller's agent aligned with the seller - he/she does not have to disclose this news to you and may not tell the essential fact initially in an effort to get the higher offer from you.

Now, back to dual agents. Every so often your will find an agent that says they are performing in a dual role; meaning they are serving as a buyer and seller agent. Be careful in this situation. As a buyer you may want to stay clear of a dual agent. Realistically, the dual agent is unable to fully negotiate the buyer's interests without adversely affecting the seller and visa versa. There are some admirable agents that can operate effectively in the dual role. However, as a buyer, you should be conscious of the prospective conflict. If you want the bottom price on a home, seek a reliable buyer's agent whose loyalties are aligned wholly with you.

You may be wondering who actually pays for a buyer's agent. Typically the selling agent lists the house in the MLS ("multiple listing service") and agrees to split the commission with the agent who brings the buyer. Frequently, the seller's agent and the buyer's agent split the real estate commission with fifty percent for each agent. This means that although the buyer's agent is representing for you, the seller is funding the commissions to the buyer's agent. At times you may find a house where the selling agent does not agree to split the commission with the agent who brings the buyer and in that case you will have to settle on who will pay for the buyer's agent.

Knowing the financial, legal and ethical implications of buyer, seller and dual agents is important to you as a home purchaser. Prior to engaging in any real estate transaction as the home buyer, find yourself a good buyer's agent with at least 10-12 years of experience in your market. They will have a fiduciary responisibility to act in your best interest and have the experience to help you negotiate the lowest price for the home.