What does a Real Estate Agent Do Anyway?
Real Estate Agents serve as the fiduciary agent of buyers or sellers.
At their core, real estate agents serve as the fiduciary agent of buyers or sellers, and in some cases, both. Webster’s dictionary explains, “fiduciary applies to any situation in which one person justifiably places confidence and trust in someone else and seeks that person's help or advice in some matter.” Home buyers and sellers solicit the help of real estate agents to walk them through the process of finding or selling a home. While the process involves lots of technical activities on the part of the real estate agent, the benefit to home sellers and buyers is often deeply emotional as well as technical.
A home seller will often hire an agent to “list” their property on the local Multiple Listing Service, which enables the property to have the most exposure to potential buyers. The agent will help the seller establish a reasonable sale price based on a current market analysis. The agent will also expertly market the property to help the seller obtain the highest possible sale price in the shortest amount of time. According to the NJ Consumer Information Statement, the duties of a seller’s agent “include reasonable care, undivided loyalty, confidentiality and full disclosure.” Real estate commissions are typically paid by the seller to both the listing (seller’s) agent and the buyer’s agent.
A buyer’s agent helps someone to find a home. A good agent will ask a buyer many questions about their lifestyle and overall life goals to help them find a home and a neighborhood that fits their vision for life. Buyer’s agents can take buyers to any home that is actively listed on the Multiple Listing Service, which gives buyers many choices in their home shopping. An agent may also connect a buyer with properties that aren’t on the market, through connections with past clients and direct contact with potential home sellers who may be hesitant about listing on the MLS, but want to sell their home. A buyer’s agent will help home buyers compete for properties in “bidding” wars, and also help them negotiate the best price with sellers of homes that may be on the market for a long while. According to the NJ Consumer information Statement, “buyer’s agent may not make any misrepresentations on matters material to the transaction, such as the buyer’s financial ability to pay, and must disclose defects of a material nature affecting the physical condition of the property which a reasonable inspection by the licensee would disclose.” It is of great benefit to home buyers to have an individual agent represent them in their purchase, because they provide tremendous value at no cost to buyers. The real estate commission is typically paid by the seller to the buyer’s agent.
Sometimes, an agent will work for both the buyer and the seller in the same transaction, which is called a “dual disclosed agency relationship”. More often than not, this happens when a buyer’s agent helps his or her client purchase a home that is listed with a colleague in the same company. Even though there are two separate agents working on the transaction, there is still a “Dual Agency” relationship when both agents work for the same brokerage. However, it can happen that one agent represents both the seller and the buyer. The NJ Consumer Information Statement explains that, “A real estate licensee working as a disclosed dual agent must carefully explain to each party that, in addition to working as their agent, their firm will also work as the agent for the other party. They must also explain what effect their working as a disclosed dual agent will have on the fiduciary duties their firm owes to the buyer and to the seller.”
Moving is hard! There are so many steps and details to manage on the road to selling or buying a home. If you are doing both-- selling one home to buy another--it can be even more stressful. The advantage of having an agent is that you have a trusted advisor who can educate you and support you through each step in the journey. Be sure to find someone you like! The typical real estate transaction is about 30-60 days in length, although some can take as long as 6 months to a year. If you feel overwhelmed, frustrated, or confused in the home selling or buyer process, your realtor is there to be a sounding board and coach throughout the journey to your new home. Often, when the transaction is complete, you will find you have developed a true friendship with your agent, because that person helped you step into the home of your dreams.
