The process of buying or selling a home requires a lot of thought, time and research.
When you begin the process of selecting a real estate agent, you should know your options with regard to Arizona law and select an agent who will be prepared to represent your interests and with whom you will develop a fiduciary relationship (a relationship that involves great trust and confidence).
In Arizona we have three types of representation:
Seller's Agent: A seller’s agent is someone who works for the real estate firm employed by the seller to market and sell a property. In the Northern Arizona Multiple Listing service (MLS), all offices cooperate to sell each other's listings. The seller’s agent works for and owes fiduciary responsibilities to the seller and has the seller’s best interests in mind. A seller’s agent will conduct a market analysis to assist in finding a suitable price for your home. Your agent will market the property, as well as provide information on preparing your home to show it at its best. When a purchase contract is presented, the agent will assist you in negotiations to get the best possible price for your property.
Buyer’s Agent: A buyer's representative represents the buyer who is purchasing property in a real estate transaction. The buyer's representative works for and owes fiduciary responsibilities to the buyer and has the buyer's best interests in mind throughout the process. Typical services provided by a buyer’s agent include locating properties that fit the buyer’s requirements and assisting in negotiation with the seller. A buyer’s agent will provide information on market conditions so that the buyer can feel comfortable about the purchase they are making.
Dual Agent: This situation occurs when a buyer's agent shows the buyer a listing held by the agent’s own real estate firm. Since the agent has responsibilities to both parties and the seller typically pays the commission, the agent’s loyalties are split. Dual agency is permissible in Arizona, but only with the knowledge and informed consent of the buyer and seller in advance. Both must agree to it in writing using an Arizona Association of Real Estate approved document entitled "Consent to Limited Representation." When agreeing to dual agency, the participants acknowledge that neither the broker nor the broker’s licensee can represent the interest of one party to the exclusion or detriment of the other party.
Whether you are a buyer or seller, your agent will ask you to review and sign a document titled "Real Estate Agency Disclosure and Election," the document spells out exactly who the agent is representing.
All representation should be clearly understood by both the home buyer and seller before entering into a purchase or listing contract. Knowing how you will be represented will help ensure a smooth transaction and avoid misunderstandings. Ask your realtor to discuss "agency" with you.