Mimi's Grapevine: Buyer Agent or Transaction Broker

The musings of a kind but opinionated long-time Realtor who loves her job, and wants to make the experience of buying or selling a home as positive and stress-free as possible.

Buyer Agent or Transaction Broker

Surely there must be a plethora of articles on ActiveRain about the pros and cons of whether or not we should work with our clients as Buyer Agents or Transaction Brokers.  Since I’m still a relatively new kid here, and I don’t know if Transaction Brokers are common around the Country, I would like to weigh in on MY side of the debate.

Here are the standard definitions given in Colorado materials:

A Buyer's Agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the buyer. The buyer's agent must disclose to potential sellers all adverse material facts actually known by the buyer's agent including the buyer's financial ability to perform the terms of the transaction and, if a residential property, whether the buyer intends to occupy the property.  A separate written buyer agency agreement is required which sets forth the duties and obligations of the broker and the buyer.

A Transaction-Broker assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning a property or a buyer's financial ability to perform the terms of a transaction and, if a residential property, whether the buyer intends to occupy the property.  No written agreement is required.


AdvocatingThe main difference, it is often noted, is the word ADVOCATE.  A Buyer’s Agent has the ability and the responsibility to ADVOCATE for their clients.  Many Agents used to ask, “Why would you work with a Client as a Buyer’s Agent when you can work with them as a Transaction Broker?”

My response to this question is not the word ADVOCATE, it is the word PERSONALITY.  I can’t imagine being a neutral party in a transaction when I am representing someone.  I can’t imagine not disclosing to my Client what information I know to help them make an informed decision.  “Just the facts, ma’am, just the facts,” is not a manner that I could possibly adopt in doing my business.

So my default will continue to be Buyer's Agent because I can’t imagine not getting excited and involved and ADVOCATING for someone with whom I’m working.

 

Selling homes throughout Colorado Springs, Old Colorado City, Manitou Springs, and surrounding areas

 

     

Mimi Foster

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Mimi has received the honor of being voted one of the best Realtors in Colorado Springs five years in a row. With over two decades of experience, she is committed to making the home buying/selling process as painless and enjoyable as possible. Read Full Bio…

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Comment balloon 13 commentsMimi Foster • June 18 2011 01:24PM

Comments

The only time I work as a transaction broker is when a buyer wants to purchase one of my listings and they don't care to bring in another agent to represent them.  I prefer they have one, but sometimes they don't see why it would benefit them, even though I encourage them.

Posted by Ann Allen Hoover, CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL (RE/MAX Advantage South) about 9 years ago

I feel the same way, Mimi. Transaction broker is almost impossible for me as I always will have a preference for one party over the other. Sometimes I know on a personal level, as a past client, friend of relative, both parties. That gets too difficult for me to choose who to represent. I hope it never happens again.

Posted by Glenn Roberts (Retired) about 9 years ago

that is also the way I work it, Ann.  I do encourage them, but sometimes it just works that way and I work VERY hard at maintaining neutral ground because it is not in my personality

It doesn't always work out well, Glenn.  I really dislike it

 

Posted by Mimi Foster, Voted Colorado Springs Best Realtor (Falcon Property Solutions) about 9 years ago

Hi Mimi,  All FLorida agents are transaction agents unless they disclose a different relationship with th e client.  In most cases I represent only one side of the transaction and am free to advocate for that position.  In some cases I repesent both sides of a transaction and assume a neutral position.   Either way I am able to help the parties see the value inherent to the property and the best way forward.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) about 9 years ago

I wonder if it is a gender issue, Bill?  :)  (that was just a random thought)

Posted by Mimi Foster, Voted Colorado Springs Best Realtor (Falcon Property Solutions) about 9 years ago

We do not have Dual Agency, David (TB comes as close as it gets but is NEUTRAL representation as opposed to 100% for each side ~ like THAT could actually happen).  We do not, as a rule, use attorneys in our transactions.  In the almost two decades that I have been doing this, I have only had one deal that used a lawyer and it was a HORRID, ABYSMAL, and OVERWHELMING failure :) (did I make my point? LOL)

Posted by Mimi Foster, Voted Colorado Springs Best Realtor (Falcon Property Solutions) about 9 years ago

I have worked as a "transaction" broker on a couple of occassions for a FSBO.  They have a buyer but they are stumped.  I step in and for a fee right up the contract exactly as dictated by the buyer and then signed by the seller.  I make sure the terms of the contract as written are adhered to but make no recommendations to either party.  It's tough to hold my tongue but it does work.

Posted by Cindy Jones, Pentagon, Fort Belvoir & Quantico Real Estate News (Integrity Real Estate Group) about 9 years ago

Isn't it, Cindy?  I could never work, for the most part, as a TB. 

Posted by Mimi Foster, Voted Colorado Springs Best Realtor (Falcon Property Solutions) about 9 years ago

Mimi: We do have Dual Agency here in PA and I am not a fan! We also have transaction licencees, and for those that use them, the fee is often 1%, versus the higher fees you see for Buyer and Seller agency. Fortunately, my company does not practice Transaction Agency, so it is not an issue for me. Why anyone would pay 1% on say a $500,000 + selling price is beyond me. Even an attorney who charges by the hour, instead of the transaction, would be less than 1% of that amount.

Also, attorneys are not the norm in PA and are used routinely in northern NJ, but not South Jersey ( I am dual licensed).

Posted by Anne M. Costello (Weidel Realtors) about 9 years ago

We have both options here in Texas as well. I've been in both situations and I can say being a transaction broker is a very difficult balance and is often more stress than it is worth. However sometimes that is what it takes to complete the deal.

Posted by Mike Wong, Realtor: Commercial, Residential, Leasing, Invest (Keller Williams Realty Southwest) about 9 years ago

In Florida it is all transactional, we are transaction brokers and we do not have "clients" we have "customers".  Buyers agency can be a relationship with an agreement, however, not too many in my market area work as buyers agents.  This was difficult for me to get use to coming from NJ where we were sellers, buyers or dual agents/

Posted by Christine O'Shea (Christine E O'Shea Broker) about 9 years ago

So hard to be a Dual Agent, Anne. They finally outlawed it here in Colorado.

Totally agree, Mike.  Sometimes you have to be neutral, but when I have the choice, I will be INTENSE ;)

Interesting, Christine.  I have never worked with a Customer, although that is one of our options.

Posted by Mimi Foster, Voted Colorado Springs Best Realtor (Falcon Property Solutions) about 9 years ago

Mimi - another great post.

Not sure what you'd call this experience, but I found myself on one occasion as the buyer's agent (signed agency agreement) getting direction directly from a seller. The seller was a loose canon calling the buyer to negotiate, and calling me with instruction for writing the PSA!!! The listing agent seemed to check out, and I didn't hear back from her until the deal fell through (thank goodness).

Very disconcerting to find myself in that situation and became a little detached out of necessity.

Posted by Roseanne Campagna, Kent/DesMoines/Blk Diamond/Renton/Maple Valley, WA (John L. Scott RE Maple Valley, WA ) about 9 years ago

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