A MUST READ FOR BUYERS AND SELLERS

A Must Read For Real Estate Buyers & Sellers

What every Buyer and Seller must know about how Real Estate works in Georgia!

This is an English language explanation, not a legal language explanation. It is designed to be helpful to Sellers and Buyers in understanding the basics of the new relationships used in Real Estates sales. Always seek your attorney's advice and council on legal matters such as Real Estate Contracts and Agreements.

During the past several years significant changes have occurred in Real Estate in Georgia. Probably the most important is the changing of Purchase and Sale Agreements that are more towards a “Buyer Beware” style of contract than had been the case in previous years.  Along with that change was the introduction of Buyer Agency and its associated Agreements, and its adoption by the Georgia Real Estate Commission for use in Georgia. These agreements give the Buyer a resource they can hire to work as their expert when purchasing property. 

 Selling Agency Agreements (Listing Agreements) and this new type of Buyer Agency Agreement determine who works FOR or WITH a Seller and Buyer, and you should fully understand the differences before setting out to select a real estate agent!

Quick Definitions:

Buyer Agency: Georgia State law prohibits Broker (agent) from representing Buyer as a Client without first entering into a written agreement with Buyer under O. C. G. A. section 10-6A-1.

A Buyer’s agent that is not under agreement works WITH i.e. assists, the buyer as a customer but does represent the Buyer as a client.

All agents in Georgia work For the Seller and not the Buyer, unless the Buyer hires their agent to work FOR them.  

A Buyer’s Agent is accountable to the Buyer and their interests and represents that Buyer in purchase sale contract negotiations, as well as property searches for the Buyer. They work FOR Buyers as opposed to working WITH Buyers.

Buyer Brokerage Agreement is the contract used By the Buyer to hire the agent to work FOR them in order to purchase property. These Agreements can be Exclusive or Non Exclusive Agreements.

A Listing Agent lists and advertises properties for sale by their Owners and represents the Owner / Seller’s interests and negotiates for the Seller in Purchase and Sale contract negotiations. They specialize in valuations of property and marketing and attracting Buyers and their Agents to the Seller’s property.

A Seller Listing Agreement is the contract that is used by the Seller to hire the Agent to work FOR them and represent them in all aspects of selling their property. These Agreements can be Exclusive or Non Exclusive Agreements.

Retainer Fee: Most successful agents today charge a nominal, refundable at closing, retainer fee as part of the Listing Agreement or Buyer’s Agency Agreement. 

What does it all mean?

In Georgia as a Seller you should hire a Listing Agent to work FOR you to sell your property. As a Buyer you should hire a Buyer’s Agent to work FOR you to buy your property.

Fairness and Honesty: All Brokers and their Agents are required by law to be fair and honest in their dealings with both Buyer’s and Sellers. Only the use of Agency Agreement makes that Agent accountable to you and puts your interests above the interests of the party on the other end of the transaction.

Examples: Joe & Mary Sellers list their property to be sold by their listing Agent and that Agent represents their best interests in the selling process and the contract negotiations. The Agent uses his/her skills, knowledge and expertise to achieve the best results for his/her Clients, the Sellers. 

Ed & Julia Buyers decide to buy property and Hire a Buyer’s agent using a Buyer Brokerage Agreement. That Agent is then bound to use his/her skills to find the very best property or properties for the Buyers. And then represents the Client during contract negotiations using his/her skills, knowledge and expertise to get the very best results for his Client and close the sale of the property they have selected. In doing so he/she subordinates the Seller’s interests and places the interests of the Buyers first in all considerations dealing with the purchase of the property.   

Larry & Mary Buyers decide to use a buyer’s agent but do not hire the agent nor do they sign a Buyer’s Agency Agreement. The agent will work with and or facilitate finding a suitable or acceptable property or properties for the Buyers. The agent cannot represent the Buyers as his/her client and can only participate in the negotiations as a transaction coordinator.  Negotiations to purchase the property are directed by the Buyers with specific instructions to the agent and may very well not take advantage of the agent’s skills, knowledge or expertise to assure the best interests of the Buyer or the best results for the Buyer.

As with any business transaction, especially the one that is most likely the largest investment you will ever make,  when you use a resource to assist you with any other major business transaction such, as home repairs, design, construction, legal representation, financial portfolio management, etc.,  you should always seek  out an expert and make sure that they represent YOUR interests first and foremost! Check their references and ask to see proof of their success in business. Unless you are an expert at buying and selling property you should always hire an expert to represent your interests when selling or buying property.

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