Vail Daily column: Choosing the right type of representation
I am looking for a Realtor to work with to help me find the best property at the best price. I have actually been interviewing Realtors and have discovered something I would like to understand better. One Realtor said that they would work with me as a “transaction broker.” If I understood correctly, they would just show me properties, but would not be my advocate, nor be able to tell me any insider information they knew about the property or the seller because they would technically be neutral, just trying to put a deal together between two parties.
Another Realtor said they would be my “buyer’s agent” and represent me, divulging all insider information they knew about the properties and the sellers and they could check a box on their form that said I was not obligated to pay any commission to them. They went on to say they felt it was more advantageous to me that I would sign a buyer listing agreement that said I was obligated to pay them a commission but it would be highly unlikely I would ever need to pay. Can you help me understand this better before I make my final decision?
Dear Wise Buyer,
I think it is great that you are choosing carefully who will represent you, and I do think it is best, in most cases, to be represented by an agent working for you rather than a functionary, putting the deal together. There are exceptions to this that we could discuss another day.
The Realtor that told you that you would be better served by signing an exclusive right-to-buy listing contract/buyer agency with the check mark in the box at 7.3.1 that says “listing brokerage firm or seller may pay, buyer is obligated to pay” would be the one I would choose, all other talents being equal. This box not only encourages your agent to show you all properties that they may know about that aren’t listed, or that are for sale by owners, or expired listing, etc., but it also gives the agent the legal right to work on getting the commission, in these cases, from the seller rather than you.
The 7.3.1 clause explains that the “broker is authorized and instructed to request payment of brokerage firm’s fee from the listing brokerage firm or seller.” That sentence allows your agent to negotiate so that the commission is paid by someone other than you. Without that clause, the Colorado Real Estate Commission will not allow the commission negotiation to be a part of any contract offer. The 7.3.1 clause does go on to say that “buyer is obligated to pay any portion of brokerage firms fee which is not paid by the listing brokerage firm or seller.”
You will know in advance, prior to signing any offer on a property, that you might be obligated to pay any or all the commission to your agent at closing. In some cases it is worth the (usually tax deductible) money to get the home you want at a great price. The chances of this clause ultimately obligating you to pay are probably less than 5 percent and it allows your agent the coverage to do their job to the best of their ability. You will be glad you took the time to understand and choose the best agent to represent you. Happy hunting!
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.SkiAndTeeHomes.com.