Insider Guide to Real Estate Transactions in Florida, Part 4: Forms of Representation
In chapter 4 of my Guide to Florida Real Estate Transactions (the series started in April, in case you missed it) I will explain where the friendly real estate agent you are talking to on the phone, by Skype, Zoom or Signal might stand – or, to say it clearer: who he (or she) represents. Hopefully your interests.
Let's dive right in:
In residential transactions (different rules apply to commercial and business transactions) agents can act only as a
• transaction broker for the seller or the buyer or
• seller's broker, representing the interests of the seller,
• buyer's broker, representing the interests of the buyer,
• non-representative, very similar to the broker model in many European countries.
Agents often represent one party exclusively, typically the seller, though an agent may show a variety of other broker’s property listings to a buyer.
If you are a buyer, you should insist that the agent you work with represents you and your interests. Working as a buyer's agent he is obligated to represent your interests and to find you the property best suited to your needs at the best possible price. A residential commission will typically be paid by the seller; this does not constitute a conflict of interest but is part of most listing contracts.
89% of US buyers claim a very good or even excellent experience in using a buyer's broker, and are very satisfied with the services and the results. Negotiating skills, experience and knowledge of the local market are the reasons most quoted for using an agent. (Survey of Recent Home Buyers ©2020 FAR).
Buyer’s advantage: without additional cost he has a professional at his side representing his interests – which is not the case if a buyer contacts the selling broker or even the seller directly, for instance by calling a telephone-number on a “For Sale”-sign.
If you are happy with your buyer’s broker, please remain loyal. Because the moment a seller or his real estate agent learn your name in any other way then through your agent, your agent will be excluded from the transaction.
This means: he can’t represent you, can’t look out for your interests, can’t negotiate for you and will not receive any commission for all the services rendered to you. The result: deep frustration, the end of your business relationship, and for you having to start all over, this time without your agent’s support.
It is a common misconception that the seller or a listing agent (the agent who markets the property) will pass on any commission savings when being contacted directly by a buyer who has the idea of cutting out one of the middle-men. Believe me: it does not happen.
In addition, foregoing or worse, circumventing a buyer's agent, does not help the buyer in any way. In contrast, the buyer most likely pays more than he has to, since the seller's agent's obligation is not to save the buyer money, but to get the best deal and highest price for the seller.
Tip: For your legal questions, please consult with a recommended Florida real estate attorney. Real estate brokers are neither qualified nor allowed to give you legal advice, and unauthorized practice of law is not taken lightly.
©2021 Tobias Kaiser
Above is an excerpt of my Guide to Florida Real Estate Transactions, which you can request for free. It is updated annually and available in English and in German. – Do you have any questions, corrections or comments? I would love to hear from you!
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Tobias Kaiser works as an independent real estate broker and consultant in Florida since 1990. Always putting his clients' interest first, he specialises in modern Florida homes and architecture, as well as net leased investments.