THE TREND TO BUYER'S AGENCY (Four reasons to use a buyer's agent)
Traditionally, until the last few years, real estate agents worked on behalf of the home seller. Obviously, the listing agent's goal was to get the best possible price and terms for the seller. Less obvious to most buyers was the fact that all agents were working for the seller under what is called sub-agency. In other words, the agent who showed the buyer the house, the agent many buyers called "their" agent, was really working for the seller as a substitute or stand-in for the agent who listed the house for sale. Under the rules of Agency, any information discovered that was helpful to the seller in getting the best price and terms in the sale of their home, should have been shared with the listing agent.
And there has been confusion and misunderstanding on the part of sellers too. Many subagents would inevitably feel closer to the buyers, the folks they had shown 5 or 10 or more houses to, and the people who had shared with them all their hopes and dreams for their new home. It was difficult for many agents to properly fulfill their duties as subagents under these circumstances.
Today, fortunately, Buyer Agency has become widespread. The roles on both sides of the For Sale Sign are clearly defined. The listing agent represents the seller. The buyer, if they choose, is represented by the buyer's agent. A majority of buyers now choose this type of representation. In almost all situations, the buyer agent's fees are paid by splitting the commission of the listing agent. In some cases, the buyer agent's commission can be paid by a third party, and in few special instances, the buyer elects to pay the commission.
In the state of Alabama, all agents are required to present information to you reviewing and explaining all the different methods of representation possible in a real estate transaction. It might seem confusing on first hearing, but is really pretty simple. If you are a first-time home buyer, have not bought a home in a number of years, are new to the area, simply don't want to worry about a myriad of details, or just don't want to deal with the increasing complexity of real estate transactions, use a buyer's agent (also called a buyer broker.) If you have bought and sold homes before, are comfortable with the process, and are confident of your knowledge of the area, you don't need the assistance and help a buyer's agent can provide; transaction brokerage fits your needs.