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The Virginia General Assembly made major modifications to real estate law in 1995.
One of the changes was to provide for Buyers being represented in real estate transactions.
Prior to that provision, all real estate agents represented the interests of the Seller.
Virginia real estate law now says that the Buyer can designate his own agent and the fees are paid from the proceeds of the sale, just as the Seller's agent is compensated. Virginia law states that agent with whom you are working represents the Seller unless the Buyer explicitly appoints the agent - All that is required is an "Exclusive Right to Represent."
What to expect from your agent
Upon appointment, an agent owes you these duties:
Care – The agent must exercise his skill and expertise on the Buyer’s behalf. This would include identifying a suitable home, evaluate property value and condition, identify financing alternatives and assist making offers and counteroffers with the Buyer’s interest in mind.
Obedience – The agent is obligated to act in good faith, following the Buyer’s legal and ethical instructions in accordance with the contract. Your agent will try to guide you in directions he knows to be successful, however, decisions concerning your transaction are made by you.
Accountability - Your agent must keep you apprised of all monies affecting the transaction. Your earnest money deposit must be placed in an escrow account within two business days.
Loyalty - This duty includes confidentiality concerning the Buyer’s personal affairs and requires the agent to place the Buyer's interest above those of all others involved in a transaction. The agent must be sensitive to possible conflicts of interest.
Disclosure – The agent will keep the Buyer informed of all properties and material facts that he knows. He will disclose any defects or deficiencies in the property or contract, Seller’s motivations and help derive an appropriate offer price, regardless of listed asking price.
What your agent expects from you
Preparation
- Sellers will not accept an offer from someone who does not demonstrate financial capacity to complete the transaction. This means that you have, in hand, a letter from a Lender stating the loan amount for which you are approved. A letter of qualification or pre-qualification is not a substitute for a letter of approval.
Decisiveness - Your agent depends on you to describe the home you want to buy. If you can't define it, he can't find it for you. Each real estate property is unique. When you find the home that meets your requirements, make an offer. If you hesitate, it may be gone tomorrow.
Loyalty - Your agent is responsible for representing you and helping you find the home of your choice. You may like the first home he/she shows you but it may require looking at three or four more. You are expected to work with that agent as long as it takes or until you tell him you want to work with someone else. If you attend an Open House without your agent, you should tell the agent at the Open House that you are already working with an agent, along with the name of the agent and the office with which he is associated.
Exclusivity - You cannot work effectively with more than one agent at a time. Your agent will want to know if you do not intend to work only with him. He will probably prefer to work with clients who agree to work exclusively with him.
Determination - If you don't succeed in buying the first home on which you place an offer, look for another one.
Compensation - If you choose to buy a home that is marketed through the Multiple Listing Service, your agent will be compensated from the proceeds of the transaction as discussed above. If you choose to buy a home that is marketed For Sale By Owner, FSBO, you may need to factor into the offer the compensation for the Buyer's Agent. This will be discussed.
Summary
You want a representative to defend your interests above all others. Some people have mistakenly thought that there might be some benefit in working directly with the Seller’s agent. Now that you have read the traditional duties that accompany an agency relationship, you can see that you could lose your potential equality to the Seller’s position if you don’t have your own Buyer’s Representative.
REMEMBER: If you don’t appoint a Buyer’s agent through an "Exclusive Right to Represent" agreement, the agent you’re working with represents the Seller.
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