Should I work with:
A Buyer’s Agent?
A Seller’s Agent?
Or Multiple Representation?
Or Designated Agency?
You should understand from the beginning of your relationship with your real estate agent what type of relationship exists.
In Wisconsin, real estate agents (both
brokers and sales associates alike) are required by law to let consumers
know whether they represent the buyer or the seller.
In the past, real
estate agents represented the seller exclusively, whether the agent helped
a seller to market and sell the home or helped a buyer find and purchase
the home. In other words, agents were at one time legally bound to represent
the seller in a residential real estate transaction. In that same scenario,
the seller paid both the listing agent and the agent who brought the buyer.
However, in today's real estate market, you may find that you can choose between a wide variety
of options for representation. If you want to sell a home, you can work
with a "seller's agent". If you are purchasing a home, you work with a "buyer's agent".
How the commission is paid
Real estate firms through the Multiple Listing Service (MLS) have an agreement as to how they cooperate with and compensate each other. If a MLS member-sales associate shows a property that is listed with the MLS, the sales associate will know the commission percentage or dollar amount their firm will receive if the buyer purchases that property. The seller pays the posted commissions.
Multiple Representation
Multiple representation occurs when the buyer and seller are both represented by the same agent, or if one salesperson from the same firm is representing a seller and another salesperson from the same firm is representing a buyer, the broker would have a multiple representation relationship. This relationship is only allowed with full written disclosure and consent from both the buyer and the seller because of possible conflicts.
Designated Agency
Designated agency is a multiple representation relationship in which each client of the broker receives negotiations services from the same broker. Designated agency is basically multiple representation but with the ability for the employees of the broker to negotiate, provide information, opinions and advice on behalf of the clients. The sales agents employed by the broker cannot represent both the buyer and seller when providing negotiation services. Under designated agency there must be two agents of the broker involved, one for each client.
Keep in mind that
real estate laws differ from state to state and even from locale to locale.
And within this framework of variety, laws can change. For more in-depth
answers for your specific situation, talk with a knowledgeable real estate
professional and ask about local practices. Be sure that you understand
and are comfortable with the options involved when you engage the services
of a real estate agent.