Real Estate Agency in MI - Part 2

Part 2 of 2

Hello again,

Now hereís the best kept secret in all of real estateÖ Are you ready?

Buyerís agency is free to all buyers in the State of Michigan.

Itís flat out the best thing going.

Sellers traditionally pay real estate commissions (they always have) and brokerage cooperation (the splitting of those commissions between the selling and buying side of a transaction) is a required component of most all real estate boards and their proprietary Multiple Listing Services (MLS). If you want to ìlistî a property, your brokerage must agree to ìcooperateî with the buyersí agents and their brokerages.

So, if you are even casually browsing for real estate, the professional services of the licensed real estate agent of your choice are free to you as a buyer, provided you have an agreement with that agent and brokerage.

(Should I repeat that sentence, or will you just re-read it for me?)

Until you enter into a buyer-broker agreement with a licensed real estate agent, and he, she, or they (in the case of a team) are your agents, you are not receiving the considerable benefits that they could be providing you. They are, in fact, duty-bound to represent the sellers of real property whom have contractually obligated agents to represent them by listing their property for sale.

Simply put, can you imagine being able to choose your legal representative in a court of law for free and declining under the assumption that, ìWell, the other side has an attorney. Weíll just see if theyíll help us out when we need itÖ?î This is not like pro bono legal work, or the Public Defenderís Office. A more accurate analogy if the legal system was designed so that any attorney working for any defendant did so for free to their client, with all of their fees paid for in full by the plaintiff, all of the time. (Wouldnít that cut down on frivolous and predatory litigation?!)

The last aspect of agency that is important for you to grasp, regardless of which side of a transaction you are on, is the position of Dual Agency. (It just sounds sinister, doesnít it?)

A dual agent is one who has both a property listed for sale and also has a buyer interested in that same property. Michigan real estate law makes accommodation for this situation by allowing dual agency, but acknowledging that an agentís ability to fully represent both sides equally and simultaneously is inherently limited. However, dual agency situations occur with some frequency.

Again, any real estate agent who has a property listed for sale has a fiduciary responsibility to represent that sellerís best interests, first and foremost; it is the cornerstone of a sellerís agent and the listing contract. Furthermore, that listing agentís commission is based upon how much they can sell that property for. Relying on the listing agent to also effectively represent you as a buyer on the same piece of property doesnít just sound counterintuitive. How will they simultaneously glean the highest possible sale price for the seller, while negotiating the lowest possible sale price for the buyer?

Remember, their commissions are a percentage directly tied to the sale price, and you know that if they have the listing they already have a working relationship, and fiduciary responsibility, to the sellers. Is the listing agent of any property going to be your most effective negotiator and strongest ally as you try to purchase your home for as little as possible?

Once you are actively looking for a property, you want to have all the professional assistance you can bring to bear ó you and the other buyers out there are and in direct competition with them to find The One. Find the best real estate agent(s) you can find and ask them to take you on as one of their buyer clients. If they give you the confused puppy dog, cocked head look, or nonsensical gibberish starts spilling from their mouths, go ahead and choose your next favorite Realtor. Or better yet, get two top agents for the price of one if you can find them!

Donít forget to respond directly to this blog by leaving a comment or question below, or you can email TEAM MIKE directly at MikeGaines@C21Northland.com or Mike.Annelin@C21Northland.com and we will happily address your inquiries.

Enjoy your weekend,

TEAM MIKE


Last Updated: November 04, 2007