Real Estate FAQs
As a real estate lawyer, I'm frequently asked questions in passing. If you have a question, feel free to post it on our Facebook page.
Do I need to work with a real estate broker?
There is no requirement that a buyer of a home work with a real estate broker. There are advantages in doing so. How did you find the house that you’re interested in? If you did not find it through a broker you need to determine if the house you’re interested in is listed with a broker. If it is, you might as well deal directly with that broker. The listing broker will be receiving a commission from the sale whether you work with that broker or not.
The listing broker is expected to have knowledge of the property, has an interest in seeing that a sale takes place, and thus is expected to be helpful as you go through the various steps of the transaction, for example during your inspections of the property. If the property is for sale by owner without a broker involved you may be able to negotiate a better deal with the owner if he is not required to pay a commission. But that is rare these days.
Should I go to my broker or the listing broker?
There was a time when each party to a transaction had their broker who acted as their agent. Under those conditions, there was a fiduciary duty owed to the principal working with his broker or agent. Today we find that almost all real estate brokers want to be free to be on both sides of the transaction so that they can earn the full commission. They do not have to split it with another brokerage organization. They cannot do that unless they are a “dual agent” which means that they do not represent either party.
Under those circumstances, if you sign a document allowing the broker you are working with to be a “dual agent”, rather than your agent, you need to know that they are not obligated to keep confidential anything that you tell them. Thus, if in negotiating price, for example, you’ve told the broker that you need to find a property to move into in a short time span, they are free to pass that information on to the seller who can use it in the process of negotiating the price.
If you are not working with a particular broker who helped you find the property, you might want to go directly to the listing broker. Under that condition, the listing broker gets to keep the full commission. If you are working with an independent agent or broker, so that the listing broker will have to split his or her commission, you will be competing in the negotiating process with any prospective buyers who are the customers of the listing agent or broker.