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Buyer Representation
Now it's the law in residential and commercial real estate transactions
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Business New Haven
7/14/97
By: Gregory Scott
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For years, in traditional real estate transactions, agents who showed potential buyers properties were working on the seller's behalf. Even if the agent didn't personally list the property that was being shown, that agent was automatically working as a sub-agent of the seller.
As of June 1, all that changed. A new state law requires that agents working with a buyer will de jure represent the buyer. The agent that has the listing will represent the seller. Should an agent show a buyer a property that is listed with that agent's company, disclosed dual agency occurs, with both parties being represented by the same company (though not the same agent).
In 1988, a national organization called the Real Estate Buyer's Agent Council (REBAC) was founded in St. Louis, Mo. to address all aspects of consumer representation in real-estate transactions. REBAC developed a Buyer Brokerage Certification Course that enabled agents to receive the Accredited Buyer Representative designation. The course gives agents a thorough understanding of the policies, practices and legalities involved in being a buyer's representative.
REBAC President Charles M. Dahlheimer explains that the purpose of REBAC's designation program is to provide a nationwide registry of agents who not only call themselves buyer representatives but who have had the training and experience to deliver the service ethically and professionally.
Connecticut's first disclosure statute was enacted in 1991 and stated that disclosure regarding who the agent represented should be made before the first personal meeting with the buyer was concluded. However, it did not require disclosure be made until prior to submitting an offer to purchase. In 1995, a revised statute required disclosure be made at the first personal meeting with the buyers. This 1996 law goes furthest in giving buyers equal representation in a transaction.
Connecticut's buyer-representation initiative now offers buyers access to an array of information a seller's agent cannot provide. The agent acts as the buyer's advocate and represents the buyer's best interests.
Buyers are free to discuss the value of properties, negotiating strategies and personal finances. Buyers can obtain their agents' opinions regarding the condition of the property, the financial impact of improvements and sellers' motivations. The agent can do a comparable market analysis on the property. Most importantly, only a buyer's agent can legally negotiate on behalf of the buyer, placing the latter's interests first.
Since 1991, Connecticut's real-estate industry has been adapting to this perceived inevitable change, with many real-estate agencies adopting their own buyer-agency policies. Indeed, buyer representation is the most important change in real estate marketing in the last 15 years. It opens up an entirely new avenue for Realtors to work with buyers, and Realtors should look forward to serving this new segment of the market.
At last, buyers can feel they have an equal footing in a transaction, as well as the confidence of knowing that an agent is working on their behalf.
Gregory Scott is president of Beazley Co., Realtors.
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