Do I really need to use a real estate agent when I buy a home? Can’t I just call the listing agent and work with that agent to buy the property? What’s the benefit of working with a real estate agent to buy a home? My hope is that this article will help answer those questions.
First let’s talk about customer services vs client services. Ultimately the decision to become a customer or client is up to you, the buyer. However, once you see the difference between customer and client services, why would you choose to be a customer?
- present all offers in a timely manner
- account for money or other property received on your behalf
- provide an explanation of the scope of services to be provided
- be fair and honest and provide accurate information, provide limited confidentiality
- disclose “material adverse facts” about the property or the transaction which are within the licensee’s knowledge
- As a customer, you should not expect the brokerage firm or its licensees to promote your best interest
- customer level duties
- reasonable skill and care
- client-level services also include advice, counsel and assistance in negotiations
Types of Buyer Representation
Now that you know the difference between customer and client services let’s talk about the type of agency (client) relationships pertaining to buyer representation. In the state of South Carolina the 3 most common agency relationships are single-agency, dual-agency and designated agency. Let’s look at the simple definitions of the 3 relationships.
- Single Agency-the brokerage firm represents only one client in the same transaction (the seller or the buyer)
- Dual Agency-exists when the real estate brokerage firm has two clients in one transaction – a seller client and a buyer client.
- Designated Agency-a broker-in-charge may designate individual associated licensees to act solely on behalf of each client.
In 2017 the South Carolina Real Estate Commission added another type of relationship that is customer based and not client based. This type of customer relationship is known as transaction brokerage. Transaction Brokerage provides customer service to a buyer, a seller, or both in a real estate transaction. Customers are buyers or sellers who choose NOT to establish an agency (client) relationship. See below to see the difference between Single-Agency and Transaction brokerage.
The SOUTH CAROLINA DISCLOSURE OF REAL ESTATE BROKERAGE RELATIONSHIPS form is much more detailed. This form should be explained at the first practical opportunity when you and the agent have substantive contact. Do not sign any agreement until this form is explained by an associated licensee (real estate agent).
Ultimately it is your decision as a real estate consumer to enter into a client or customer based relationship. Just remember that until you enter into a written representation agreement with the brokerage firm, you are considered a customer. The brokerage firm cannot be your advocate, cannot advise you on price or terms, and only provides limited confidentiality.