or their agents during the agenq' relationship without your
permission But until you make this agreement with your
buyer agent, you should avoid telling the agent anything
you would not want a seller to know.
Q: Must a buyer have a written agency agreement
with the agent who represents the buyer?
A: To make sure that you and the real estate firm have
a clear understanding of what your relationship will be
and what the firm will do for you, you may want to have a
written agreement when you first begin working with an
agent. However, some firms may' Ire willing to represent
and a.ssist you initially as a buyer agent without a written
agreement. But if you decide to make an offer to purchase
a particular property, the agent must enter into a written
agency agreement with you before making a written or
oral offer for you. If you do not sign the agency agreement,
then the agent can no longer represent and assist you
and is no longer required to keep information about you
confidential.
Q: What services might a buyer agent provide?
A: Whether you have a written or unwritten agreement,
a buyer agent will perform a number of services for you.
These may' include helping you • find a suitable property
• arrange financing • learn more about the property
and • otherwise promote your best interests. If you have
a written agency agreement, the agent can also help you
prepare and submit a written offer to the seller.
Q: How is a buyer agent compensated?
A: A buyer agent can be compensated in different ways.
For example, you can pay the agent out of your own
pocket. Or the agent may seek compensation from the
seller or listing firm first, but require you to pay if the
listing firm refuses. Whatever the case, be sure your
compensation arrangement with your buyer agent is clearly
indicated in a buyer agency agreement before you make an
offer to purchase property and that you carefully read and
undersand the compensation provision.
Q: What happens if I want to buy a property listed
by the same agent or firm that represents me?
A: You may permit an agent or firm to represent you and
the seller at the same time. This would mean that the real
estate firm and all of its agents would rqrresent you and the
seller equally. This “dual agency relationship" will happen if
you become interested in buying a property listed with your
agent’s firm. If you have not already agreed to a dual agency
relationship in your (written or oral) buyer agency agreement
and this is acceptable to you, then your buyer agent will ask
you to amend the buyer agency agreement or sign a separate
agreement or document pemritting his or her firm to act as
agent for both you and the seller. Any agreement between you
and an agent that permits dual agency must be put in writing
no later than the time you make an offer to purchase. Both the
seller, and you, as buyer, must consent in writing to dual agency.
Q: What is the risk if I agree to dual agency'?
A: Dual agency creates a potential conflict of interest for the
film that rqrresents you since its loyalty is divided between you
and the seller. It is especially important that you have a clear
understanding of what your relationship is with the firm and all
of its individual agents, since all of them are dual agents. This
can best be accomplished by putting the agreement in writing
at tire earliest jxtssible time and asking any questions that you
may have. A dual agent must treat buyers and sellers fairly and
equally and cannot help one party gain an advantage over the
other party. Although each dual agent owes both their clients
the same tluties, buyers and sellers can prohibit dual agents
from divulging certain confidential information about them to
the other party.
Q: How can I reduce the risk if dual agency’ occurs?
A: To minimize conflicts of interest, some firms also offer a
form of dual agency called “designated dual agency" where
one agent in the firm represents only the sella- and another
agent represents only the buyer. The firm and the film's
other agents remain in dual agency. This option (when offered
by a firm) may allow each “designated agent" to more fully
represent each party. Under designated dual agency, each agent
designated to represent the buyer is prohibited from disclosing
(1) that the buyer may agree to any price or terms other than
those established by the buyer, (2) the buyer’s motivation for
buying, or and (3) any information the buyer has identified as
confidential, unle,ss otherwise required by statute or role.
Q: What happens if the buyer agency’ agreement
expires?
A: If the buyer agency agreement expires after you entered
into a contract to purchase a property, then your agent may
continue to rqiresent you through the date of the closing
and you may be responsible for compensating the film in
accordance with the provisions of the buyer agenq’ agreement.
If you are not under contract to buy a property when your buyer
agency agreement expires, then your agent must immediately
.step representing you unless you first enter into a new buyer
agency agreement with the agent.
Q: Can I buy real estate without hiring a real
estate agent?
A: Yes. If the real estate agent or firm that you contact does
not offer bqer agency or you do not want them to act as your
bqrer agent, you can still work with the firm and its agents.
However, they will be acting as the seller’s agent (or “subagent”).
The agent can still help you find and purchase property and
provide many of the same services as a buyer’s agent. The
agent must be lair with you and report any “material facts”
(defects such as a leaky roof) about properties. But remember,
the agent represents the seller— not you— and therefore
must try to obtain for the seller the best possible price and
terms for the seller's property and cannot give you advice on
brning the property if it will conflict with the seller’s interests.
Furthermore, a seller's agent is required to give the seller any
information about you (even personal, financial or confidential
information) that would help the seller in the sale of his or
her property. Agents must tell you in writing if they are sellers'
agents before they ask you about anything that can help the
seller. But until you are sure that an agent represents you and Is
not a seller’s agent, you should avoid saying anything you do not
wunt a seller to know.
Q: If I am an unrepresented buyer, who pays the
real estate agent?
A: Unless you agree otherwise, seller’s agents are
compensated by the sellers.
Q: Can the real estate agent who represents the
seller require me to hire an agent to represent me?
A: No. While it may benefit you to hire an agent, there Is
no law’ requiring a bqrer to hire a real estate agent to buy
real estate.
Termination of Agency Agreements
Q: If I hire a real estate agent or firm to represent
me, can I terminate the agenq’ agreement before it
expires?
A: Maybe. An agency agreement is a contract between a
buyer or sella- and a real estate firm. Most agency agreements
do not contain a provision allowing a bqrer or seller to
terminate the agreement before it expires without the consent
of the other party. Generally', one party cannot terminate
the agreement without the consent of the other party. If
you and the firm both agree to terminate the agreement,
then you both should sign a written agency termination
agreement. If the agent asks for compensation in exchange for
terminating tire agreement, then you can agree or disagree
or try to negttiate the amount of compensation. If an agency
agreement contains a penalty or fee for early termination, the
provision specifying the penalty or fee must be set forth in a
clear and conspicuous manner. If you are not able to retch an
agreement on tire termination of the agency agreement, then
you may' consult your own attorney or simply wait until the
agency agreement expires. The Retl Estate Commission does
not have the authority to terminate agency agreements or to
force a real estate agent to terminate an agreement.
(Note This brochure is for informational purposes only and
does not constitute a contract for service.)
Buyer Agency and Seller Agency
Dual Agency
Sc*e Practitioner
Dual Agency
Buyer Broke* A Broker
В
Setter
Breaker A and Broke*
В
brokerage company
Designated Dual Agency
ft t
Broker A and Broker 8
work lor the lame
brokerage company
THE NORTH CAROLINA
REAL ESTATE COMMISSION
P.O.Box 17100 • Raleigh, NC 27619-7100
Phone:
919/875-3700
• Website: www.ncrec.gov
CO.IXXI copies of this public document uere printed at a cost of $.000 per copy.
RE C 3.45 •
1/3/22
Questions and Answers on:
WORKING WITH
REAL ESTATE
AGENTS
A publication of the North Carolina Real Estate Commission
