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In most states, homebuyers have the option of working with a buyer's agent, who owes the buyer his or her fiduciary duty, as opposed to the seller. A conflict of interest could arise, however, if the buyer's agent also accepts the seller as a client. If the agent takes a homebuyer to see one of his or her listings, the buyer may soon be without any representation because the agent is then a dual agent.
To avoid such a conflict, hire an exclusive buyer's agent (EBA) because they never represent sellers. Occasionally, your EBA might represent two buyers who are interested in the same property. In that case, another EBA in the agent's office can help one of the buyers make an offer.
The only document the buyer will have to sign is an agency agreement, which explains who will represent the buyer (buyer's agent, seller's agent, or dual agent) in the transaction. Traditionally, the buyer is not locked into using the agent and may switch at any time.
When working with an EBA, the buyer may be asked to sign an exclusivity agreement, which outlines the exclusivity of the arrangement and the timeframe. The agreement may also state that the buyer is responsible for the agent's commission.
Though the buyer's agent's contract appoints the buyer as payer of the agent's commission, in practice the buyer's agent receives a portion of the seller's agent's commission.
Don't be shy to request contract modifications. If the agent balks at such a request, consider another agent.
Though an EBA is one way to avoid dual representation, it may be difficult to find an EBA who is as familiar with the market in your neighborhood of choice as a buyer's agent is. Only you can decide what's more important: An agent who knows your neighborhood or an agent who remains exclusive to you.
-- Samuel J. Tamkin is a real estate attorney based in Chicago.
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