Please explain agents...

I have an agent to sell my house...

Another agent came last week to show my house to a buyer.....

The buyer made an offer, but the agent that showed the house said he is not the buyers agent, he is the sellers agent..

Umm, HUH??

I have an agent. Not him. He brought in a buyer, but how could he be a sellers agent???

Re: Please explain agents...

Buyers and sellers need to understand this:

The default is that an agent, regardless of who he is working with, represents the SELLER in the transaction.

A buyer has to affirmatively elect to hire a buyer's agent if the buyer wants his own agent. This is called buyer agency, or buyer brokerage, which hasn't really "caught on" on Long Island yet, but is growing in popularity. But working with a buyer's agent is the only way a buyer has an advocate in the transaction -- someone to negotiate FOR him and represent his interests. It's in the buyer's interest to have his own agent, but many agents don't understand buyer agency and don't want to do it, so they don't explain the option or offer it.

Otherwise, the agent, even if he's helping the buyer find a home, still owes all of his fiduciary duties -- confidentiality, loyalty, etc. -- to the seller. It's odd because the agent doesn't know the seller, so it's counterintuitive, but that's how it is. The agent basically represents you, the seller, through your listing agent. He is a sub-agent of your agent (also called a broker's agent). So that agent is supposed to be trying to get you the most money and protecting your interests.

If an agent is working for the buyer as a buyer's agent, he is supposed to disclose that when he makes an appointment to show your home, and the listing agent's office should let you know this when they set up the appointment.

Re: Please explain agents...

So, would a buyer PAY to have their own buyers agent?

And then what % does this guy get for selling my house? I was under the understanding that our 4% gets split 2.5% to the agent who sells the house and 1.5% to the agent I hired. Does the % change?

Re: Please explain agents...

Buyers typically don't pay their buyer's agents out of pocket (although they could). It's usually paid out of the seller's proceeds, because typically compensation is offered by the listing agent to both buyers agents and broker's agents, or it's negotiated into the deal by the buyer's agent when he presents an offer on behalf of a buyer.

You have to ask your listing agent what they've offered out. Usually, a listing agent will take it for x% and then offer out x% to both brokers agents and buyers agents (basically, they offer out a percentage -- e.g., 2% -- to an agent who brings a buyer, regardless of what the relationship is with that buyer). If they've offered out nothing to a buyer's agent, or a lower fee than the agent wants, the buyer's agent can try to negotiate his fee into the sale by saying "my buyer is offering x dollars which includes my x% fee." As the seller, you would just factor that term of the offer into your negotiations to make sure you are getting what you want or need.

In some rare instances, a listing agent may offer out 0% to a buyer. I've also seen it where listing agents only offer compensation to buyer's agents NOT to broker's agents, because they don't want any agents working as sub-agents of them. To me, it doesn't make sense to offer out compensation to one type of agent and not another. The purpose of your listing agent putting it on MLS is to give your listing maximum exposure and draw in the maximum number of buyers. But this really should be discussed with the seller at the outset, when the listing is taken..

You should talk to your listing agent about the difference between a buyer's agent and a broker's agent, and find out what fee split he/she is offering in both cases. Also, if you have a copy of your listing contract, page 2 of the agreement should specify what is being offered out to broker's agents and buyer's agents on MLS.

Re: Please explain agents...

Christine, just to clarify, with respect to the situation of the OP, this particular broker's agent most likely did not sign a buyer's agency contract with the person he showed the house to right? Otherwise he would be a buyer's agent? Am I missing something?

Re: Please explain agents...

Yes, since the agent who showed the OP's house was NOT a buyer's agent, and said he was working for the seller, then he is likely a broker's agent (working for the seller via the listing agent).

That is more often than not the case on LI, although buyer's agency is growing in popularity.

A broker's agent will be compensated by whatever percentage of his commission the listing agent is offering out (it will be listed on the MLS listing accessible to the agents). So the OP won't be paying any additional commission -- the listing agent and the agent who brings the buyer will share in the commission the OP negotiated when she signed her listing agreement.

Sorry I went off on a tangent, but there is just so much confusion among consumers re: how agents work with buyers, how they are compensated, etc., that I took the opportunity to explain.