Realtors are commonly called “agents,” but why?  Real estate is practice under the “law of agency,” which means that one party, the “agent,” represents the interest of another, “the principal.”  How does this really apply to you?

If you are a seller, you enter an “agency relationship” with the agent you choose to be your real estate advocate at the time you sign your listing agreement.  At that point, the agent you chose must act on your behalf, with your best interests in mind, to find a buyer.  And so does every other agent out there.  In Pennsylvania, buyer agency exists in written form only, so until a buyer actually signs a buyer agency agreement with a broker, all agents represent the seller’s interests.  Yes, buyers must be treated with honesty and fairness, but this does not mean they are represented.  The seller’s interests must always come first.

So what if you are a buyer?  This is probably sounding less than favorable right now.  All the sign or ad calls you have made – the open houses you have attended – the properties you may have screened without officially having your own buyer’s agent – the agents you were dealing with all represented the sellers and had a duty to put the sellers’ interests first.  That is great when you are the seller, but as real estate transactions have become more complex, buyers need representation too.

And so evolved buyer agency agreements in the state of Pennsylvania.  Buyers now have the right to demand an agency relationship where their interests must be put first by the agent.  To have this, buyers must sign a written agreement where they agree to work with only one agent and whereby the agent is bound to put that buyer’s interests first.  With a written buyer agency agreement in place, buyers know that an agent is representing their interests and must fulfill the obligation to faithfully serve them.

If you are a seller who has done your research, chosen the agent best qualified to advocate for your interests and have signed a listing agreement, you have representation.  If you are a buyer, you should do your due diligence – research agent qualifications – seek references  – and then sign a buyer agency agreement.  Know who is representing you, and don’t leave home without them!