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When you purchase a property in or around Austin, chances are you will be working with a Real Estate Agent, or more likely, a Realtor. Realtors are bound by a strict code of ethics. Real Estate Agents, who are not members of The National Association of Realtors, do not subscribe to this code of ethics. The second difference is that Realtors in Austin are members of the Austin Board of Realtors, which maintains the Multiple Listing Service. Any Realtor can help you purchase any property that is listed in the MLS system regardless of who listed the property. Agents that are not members of the board do not have access to the MLS system, and therefore cannot list your home in the system or sell you a home listed by a Realtor. This brings us to the different ways that a Realtor or Real Estate Agent may represent you or the other party in the transaction.
Buyer's Agents
When you decide to purchase a property in the Austin area it is recommended that you hire a buyer's agent. This agent will represent you and your interest in the purchase of your property. They will work to get you the best price and terms. In addition, information that this agent discovers about you will remain confidential. Usually you will sign a buyer representaion agreement with your Realtor. Your agent will be paid by the listing agent at closing, so it costs you nothing to hire a buyer's agent.
Seller's Agents
When an agent lists a property for sale, this agent represents the seller of the property. They have a duty to get the highest price for the property as well as the most favorable terms for the seller. Information they know about the seller is confidential. A Realtor will usually list the property in the MLS, and offer to pay the buyer's agent, or sub agent a commission. The amount of commission paid to the buyer's agent is set forth in the listing agreement. The seller's agent is the only agent paid directly by the seller when the property is sold. The selling agent then pays a portion of the commission to the buyers agent. If you are trying to purchase property, you should never contact the listing agent to make an offer. The seller's agent represents the seller and will work to get them the best price and terms. The other scenario is that the listing agent will become a dual agent.
Dual Agents
Dual agency, also know as an intermediary relationship without appointments, can happen if you contact the listing agent on a property, or your buyer's agent shows you a property that they have listed. In this situation the agent represents both parties in the transaction. This is an obvious conflict of interest, and the agent ends up not able to do much but fill out the paperwork and act as a messenger between the two parties. The only person that wins in this situation is the agent, because they now get double the commission! You should avoid this situation at all costs. If you want to make an offer on a listing your agent has, ask the broker to appoint an agent to represent you in an intermediary relationship.
Intermediary
An intermediary relationship comes about when you and your agent make an offer on a property that is listed by another agent in the same office. There is a standard disclosure that goes with this situation to make sure you are aware your agent is selling you one of the office listings. Your agent still represents you and the listing agent still represents the seller. The agents are still required by law to keep all information confidential. There is no practical difference between this and any other ordinary transaction if the agents act ethically and honestly.
Sub Agents
If you contact a Realtor in Austin to show you properties, but do not have a buyer representation agreement, this agent may be acting as a sub agent. This means they represent the seller of the property, not you. Make sure you ask the agent you are working which party they represent. Agents are required by law to provide you a form titled "Information About Brokerage Services", and tell you whom they represent. Most listing agents will not pay sub agents a commission in the Austin area, becuase they and their client become liable if that agent misrepresents the property.
The Sunshine Team
Keller Williams Realty
512-784-1181
Van Heuven Properties
512-480-8944
Austin Homes - Team of full-time Austin area Realtors who assist home buyers and sellers throughout the area
Austin Texas Real Estate - Search Austin homes for sale - site offers a searchable database with thousands of property listings - Jim Olenbush, Realtors.