Florida Buyer Agent
...and Why you probably don't really have one
How an agent is working with (or for) you starts very early in the process and Florida has only two ways you can be represented.
By default, agents work as transaction brokers which in terms of representation is an inferior form of agency. Single agency is the highest form or representation but there are some things that need to happen before you go out looking. There needs to be a formal buyer agent agreement signed along with a single agent disclosure prior to looking at a home. Its much like what sellers do when listing their home but there is a lot less paperwork.
Be Sure to See Our Buyer Agency Discussion
In short, if the discussion about representation hasn't come up, you have a transaction broker that is working with you and not FOR you. There are also agreements out there that appear to be a buyer agent agreement that either have the transaction broker disclosure or no agency form as provided by the state (defaulting to transaction brokerage). These are designed to lock you in an agent while providing no higher level of service than if you signed nothing. It's good for the brokerage because you are agreeing to have that agent/brokerage work for you but doesn't provide the written level of service you should insist on when being represented.
Both transaction brokers and single agents have the requirement of dealing honestly and fairly, accounting for all funds, using skill, care and diligence in the transaction, presenting all offers and counteroffers in a timely manner, and disclosing all known facts the materially affect the value of the residential real property.
Where they differ is a single agent owes you full disclosures while a transaction brokers owes limited confidentiality unless waived by a party in writing. Limited confidentiality prevents disclosure or motivation of any party for selling or what a buyer might pay for a property, and that party’s willingness to agree to financing terms other than those offered, or of any other information requested to remain confidential. So if you are in a negotiation, the seller counters but mentions they would take less, a transaction broker would not be permitted to tell you this important bit of information. A single agent is required to tell you.
Single agents also owe you loyalty, confidentiality, and obedience where a transaction broker has none of these obligations.
The form of representation a buyer or seller selects will bind the entire brokerage and not just an agent/licensee working at the firm. A buyer wanting single agent representation binds the entire brokerage to a single agent relationship. Florida does not permit dual agency so if there is a home listed by the same firm, the single agent would have to slide back, with your consent, to being a transaction broker. There is a specific agency disclosure that permits single agency WITH the consent that the agent can go back to transaction broker status if there is an in-house listing you want to buy. We see this as a water-downed form of representation. There are other options.
This is why, in many cases, it is best to work with smaller firms as the possibility of having to change to transaction brokerage is reduced. Bigger is not always better.
Transaction brokers can work with both the seller and buyer in a transaction. Limited representation allows a licensee to facilitate a real estate transaction assisting both parties providing the agency does not work to the detriment of the other party. The buyer and seller are not responsible for the acts of the licensee and give up their right to undivided loyalty from the licensee. Florida does not permit “dual agency.” This is why the perception of working with the listing agent is somehow a good way to get a “good deal” is at best, a misdirected and a poor choice.
Many larger firms do not permit single agent representation as a company policy for several reasons. The possibility of selling “in-house” properties is hampered if single agency is utilized to any extent. Less talked about and a more significant reason why larger brokerages only all transaction brokerage is the fact that higher levels of service requires a higher level of knowledge by all agents in their firm. The lack of experience is a source of higher liability to the brokerage. This is especially true in many Florida real estate markets like Sarasota/Manatee. Following the Realtor Association of Sarasota and Manatee (RASM), posts showing over 100 new licensees passing orientation per month are not uncommon. That is a lot of new agents! They are all going to work somewhere and are all looking for their first commission check. Any mechanism that brokers can reduce liability (like transaction brokerage) from what all these new agents might do or not do is seen as a great risk-reduction strategy from the brokers’ prospective.
Avoid Watered Down Representation
If you have decided you want representation, that's a great first step. Where many agents will water the level of representation is by asking you to sign the Single Agent with Consent to Transition to Transaction Brokerage. This is so they can sell their in-house inventory. In the end, it costs you valuable information that can translate to paying a higher price simply due to the limited confidentiality transaction brokers operate under. Accept only Single Agency.
The next area has to do with the contract they use. There are two available to REALTOR members from the Florida Association of Realtors. Most contracts are written on the as-is contract. This is sold to buyers because it gives an unconditional right to cancel during the inspection period. What they don't tell you, is that you will also waive any future claims against any licensee involved in the contract. Brokers want this contract used because it reduces their liability which is key to larger brokerages that are bringing new agents into their firm every month. We did a complete video on Buying a home As-Is in Florida that explains a better way to buy.
Buying on the as-is contract and using a transaction broker to buy a home is a watered down form of representation.
How to Know who to Choose
Many local agents gained their experience through years of serving customers at a high level. Many of the nationally based real estate sites tout number of sales and sales volume as a benchmark of success which is misleading. There are only so many customers an agent can personally service so some of the larger numbers are reflective of team sales. Many teams are made up of lesser experienced agents and access to the senior team member may be limited is at all.
An important benchmark that is rarely ever reported would be the average list to sales price as compared to the overall market list to sales price. While no statistic should be used by itself as an indicator, this statistic can be telling. If looking for a buyer’s agent, an agent whose average is below the market average would be a good agent to have as a buyer agent as they negotiate at a higher level than the market to get a better price.
Our agents will generally have over 10 years of experience which means we have survived both good and bad markets. Experience is gained through some of those challenging market conditions which can be a benefit to you when buying.
We make it easy to bring us in to your purchase process. From getting the right properties to you, keeping you informed, making the recommendations that assure your purchase decision is sound, a smooth and hassle free closing, to being there after the sale. It is about trust and being a source for real estate you feel comfortable referring to you your family and friends. We also understand that sometimes things don’t go as planned and make it easy to terminate our representation. All with no upfront commission fees as the seller pays our commission.
Related Info / Sample Forms
- Buying on the As-Is Contract
- Transaction Broker Disclosure (not required to be given or shown)
- Single Agent Disclosure (required for true Buyer Agent relationships)
Now for the obligatory legalities. We are not attorneys and as such, cannot provide legal advice.
The above article is not intended as legal advice. If you are seeking legal advise,
please seek an attorney that can best advise you.
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