A Buyer's Agent, frequently called a Buyer Broker or Buyer Representative, is a Realtor who represents only the interests of their buyer-client in a real estate transaction. Just as a Seller's Agent represents only the interests of their seller-client.

Duties owed to Buyer Clients:

• Loyalty - The Agent must put the Client’s interests above their own;
• Obedience - The Agent must follow lawful instructions of their client;
• Reasonable Skill & Care - The Agent must negotiate the best deal for their Client;
• Disclosure - The Agent must disclose all information to their Client;
• Confidentiality - Conversations and information between the Client and Agent must be kept confidential, even after the transaction has been completed.

It is a common misconception that just because a Realtor is showing you properties that he or she is automatically working for you. This most definitely is not the case.

As a result of confusion about who a Realtor was representing, Connecticut passed a law mandating Buyer Agency. See details below. 

In the 1980's the Federal Trade Commission conducted a study and found that 72% of all buyers believed that the Realtor they worked with was representing their interests. They were not. This report fueled a nationwide concern about Agency. In response to these concerns, many states enacted legislation requiring disclosure, but Connecticut, to its credit, went further. Connecticut is one of the few states that requires Buyer Agency. For complete details, see the Connecticut Real Estate Commission’s Policy on Agency.
 

Under Connecticut Law:

• a buyer must sign a Buyer Representation Agreementto be represented;
• a Realtor cannot show a Buyer another firm’s listing without a signed Buyer Representation Agreement;
• a Realtor can show a buyer-customer properties listed by their firm (in-house listings) without a signed Buyer Representation Agreement. However, the buyer must first have their rights explained and be given the option to be represented.

To learn more about Connecticut Buyer Agency download and read the article we wrote, What You Should Know About Agency. Another good source of information is the Connecticut Association of Realtors Pamphlet on Agency.

To really understand Buyer Agency you need to know a few definitions.

Agent
An agent is the person who acts for and represents their client. An agent owes the utmost loyalty to their client and must provide their client with any information the agent knows which might influence the client’s decision to buy.

Seller Agency
All Realtors at a real estate brokerage firm represent sellers who have listed their property with that firm. They are all agents of and owe their allegiance to that seller.

Sub-Agency
Sub-agency is legal in Connecticut, but is not practiced in Greenwich. Under sub-agency, a Realtor showing a property not listed by their firm, represents the seller as sub-agent of the seller’s agent. It is that sub-agent’s duty to protect the seller’s interests at all times. Before Connecticut enacted Buyer Agency law in 1996, all Realtors showing properties to buyers were sub-agents and represented only the interests of the seller. Sub-agency is still the standard for most of the USA.

Client
A client is the principal in the transaction. The Agent works for their client. A seller becomes a client by signing a listing agreement. A buyer becomes a client by signing a buyer agency agreement.

Customer / Unrepresented Buyer
A customer is a buyer who is not represented in the transaction. A customer is traditionally a buyer who is buying a product from a salesperson. You should expect the salesperson to provide honest information, but you would not expect the salesperson to negotiate the best price for you. Realtors are obligated by law to treat customers honestly and fairly and to disclose material facts about a property, but are not allowed by law or ethics to provide a customer with advice in the transaction or to keep the customer’s conversations confidential.

• A Realtor cannot provide advice or counsel to an unrepresented person.
• An unrepresented person has the responsibility to protect his or her own interests.
• The only obligation a Realtor has to an unrepresented person is to be honest and disclose material facts.

Any Realtor can sell you a home, but a Buyer’s Agent can research a property for you and offer unbiased, professional advice on every aspect of your purchase, including details about realistic pricing and negotiation strategies.

Example 1: You see a house advertised in the newspaper, a home magazine, or the Internet. You contact the Listing Agent (this is who will be advertising the home) and make an appointment to see the house. The Agent is friendly, informative, and tells you what you believe to be everything about the house. But this is not in your best interests. The Agent represents the seller, not you. You should first find a Realtor you like and trust, sign an Agency Agreement with them and then when you see an advertisement call your Buyer-Agent to discuss it.

Example 2: You are working with a Realtor, who shows you 25 different homes over 3 weekends. The Realtor buys you lunch twice, knows all 4 of your children by name as well as all of your personal likes and dislikes, but does not offer Buyer Agency. You feel comfortable with the Realtor, revealing important personal information. Without Buyer Agency, "your" Realtor is the Agent of and represents the Seller. He or she owes loyalty to, each and every one of those 25 sellers--not you. Any information you reveal to the Agent must be relayed to the sellers.

Example 3: You have decided to bid on a home listed by the Realtor you have gone out with. He or she tells you it is a good price. Should you place an offer for it at that price? If your Realtor is not your Buyer-Agent you have no way to know. They are not obligated to help you make that price decision or negotiate better terms. If your Realtor is your Buyer-Agent, they will tell you when a home is over or under valued, negotiate to get you the best deal and do a Comparative Market Analysis to help you with difficult decisions.

 

Q. How is a Buyer Agent compensated?
A. Our Buyer Agents are always compensated by the Seller. Commissions on properties listed on the MLS (Multiple Listing Service) are paid by the Selling Agency. For properties listed directly by owners, we ask the owner to pay our commission.

Q. Can I get a better deal by calling the firm advertising a listing?
A. Many people see an advertisement in the paper and call the listing company. This may seem like the best way to see a property, but it is precisely the wrong thing to do. The Realtor you are calling is the agent of the Seller. Their goal is to sell this property at the best price they can get for the Seller. Because many of the large real estate chains give their Realtors an extra commission if they sell the company’s listings, the Realtor you contact may have a special interest in selling you the house. In any event, they do not represent you or your interests.

Q. What training is required to be a Buyer’s Agent?
A. No training other than a real estate license. In Connecticut, because the state is a buyer-broker state, most Realtors get buyer representation training as part of their continuing education. In addition, they obviously get buyer representation experience every time they work with a buyer. REBAC (Real Estate Buyers Agent Council), a wholly owned subsidiary of the National Association of Realtors, also trains Realtors to be Buyer Agents and awards the ABR (Accredited Buyer’s Representative) designation to those who meet their educational and experience requirements.

Q. Do Buyer Agents collect compensation from both parties?
A. No. An agent for the Buyer cannot accept compensation from any other party to a transaction without the full knowledge and approval of the buyer.

Q. Don’t Buyer Agents make less money if they negotiate a lower price?
A. Realtors depend on “repeat business”. They do not get repeat business if the Buyer does not feel the Realtor did a good job. The difference in commission earned is extremely small in comparison to the good will of a client for a job well done.

Q. Would I have a better chance of finding my home if I use several Realtors?
A. No. In fact the opposite is true. Every Realtor has access to the same base of homes. When you work with more than one Realtor, the amount of time any one Realtor would be willing to devote to meeting your needs would be small.

Q. Why do I need to sign an agreement?
A. Connecticut Law requires Buyers to sign a Buyer Representation Agreement to see homes not listed by that Realtor’s firm. If the Realtor you are with does not explain this to you or ask you to sign a representation agreement, you should be worried.

Q. If I sign a Buyer Representation Agreement, how long should I sign for?
A. In all likelihood, the Realtor you contact will be willing to sign a Buyer Representation Agreement for a day or a short time such as a week. This way both of you can decide if you are right for each other. At the end of this short period, you should decide to sign an agreement for several months or move on to someone you feel more comfortable with.

Q. What happens if I sign two Buyer Representation Agreements?
A. When you first meet a Realtor, they should ask if you have signed a valid Buyer Representation Agreement with someone else and if it is still in force. If you have, it is unethical for them to work with you until you have cancelled that agreement. In the unlikely event that you end up signing two representation agreements, you should tell both Realtors and ask to cancel one of them. If you end up buying a home, both could ask for a commission. It is unlikely you would end up having to pay, but why run up legal bills.

Q. Do I need a Buyer Agent to look at homes for sale by owner?
A. No, but you should. It is amazing how often Buyers think they are getting a deal, only to discover when they want to sell that they overpaid. Your Buyer Agent will ask the owner to pay their commission and almost universally owners agree to do so.

Q. What is Dual Representation, Dual Agency and Designated Agency?
A. If one or more Realtors in a firm have signed an agency agreement with a Seller (Listing agreement) and an agency agreement with a Buyer (Buyer Representation Agreement) and if that Buyer wishes to negotiate for the purchase of that Seller’s property, then the firm is in the position of representing both parties. This is called Dual Representation. Dual Representation can take the form of either Dual Agency or Designated Agency.
Under Dual Agency, usually one Realtor represents both the Buyer and the Seller. If that Realtor is trusted by both parties, this can often work out to both parties benefit. Both the Buyer and the Seller must sign a Dual Agency consent agreement.
Under Designated Agency, one Realtor Represents the buyer and another Realtor in that same firm represents the Buyer. For firms which have the required safeguards, this option allows each Realtor to completely represent the interests of their client. Both the Buyer and the Seller must sign a Designated Agency consent agreement.

Q. Why wouldn’t every buyer want a Buyer’s Agent working for them?
A. We have no idea.

• Buyer Agency in Connecticut Booklet by Gerald Anderson)
• Policy on Buyer Representation
• Policy on Dual Representation
• Buyer Representation Agreement
• Designated Agency Agreement
• Article on Agency in Connecticut
• Pamphlet on Dual and Designated Agency (CT Association of Realtors)

For more downloadable Forms of Interest to Buyers, click here.