How confidential is your offer?
I was reading a post by Margaret Rome about confidentiality and it got me thinking about that.
Firstly in Pennsylvania until you either sign a buyer agency contract or a listing contract the agent does not have to hold the information you tell them in confidence. You are unrepresented, and anything you share can be used against you in negotiations. Many buyers visit open houses and share information with the agent sitting the open house who represents the seller without thinking. Always be cautious in real estate what you share and with whom. In fact whenever you meet a real estate agent in a potential real estate transaction they should ask if you are represented andexplain agency to you and present you with a Consumer Notice which covers our duties and obligations in the different roles.
One of the questions we get asked a lot is, "How confidential is my offer?"
To understand the answer we need to return a little to explain agency in Pennsylvania and along the Main Line. Any agency contract, listing or buyers' agency is between a Broker, the company the agent works for and you, the agent who is an independent contractor represents the broker.
Who represents whom? In a transaction you are either represented or not. If not as I mention above anything you say can be used against you by the agent representing the other party. Loose lips can cost you money! A broker can be a Transaction Broker where they represent neither party and are only there to help the transaction take place, they give no advice to either party.
Before buyer agency was introduced buyers often thought the agent showing them the house represented them, when in fact they represented the seller as a sub-agent of the listing broker. With the introduction of buyer agency, this ceased, because bigger brokers do not want agents from other brokers representing thier clients because of liability issues.
So if the seller is represented by the listing agent and the buyer is represented by a buyer's agent; and If both these agents are from the same firm, the broker is a Dual Agent representing both the seller and the buyer. In this situation Many Main Line real estate firms use Designated Agency, where different agents represent the seller and the buyer. Both agents work independently of each other and keep their clients information and negotiating tactics and position confidential from each other.
Sometimes you will get an agent who is a Dual agent, representing both parties, but this limits what they can do for each client. They can do nothing for either client that will injure the other party in any way. So they have to offer limited services so as not to do this. It is far better to have your own representation and the confidentiality that goes with that so there are no mistakes.
But, let's return to our original question. How confidential is my offer?
As your buyers' agent, I will only divulge the details of your offer to the listing agent. This protects your negotiating position and your tactics for achieving a purchase. However, once the offer is in the hands of the listing agent and the seller, unless the seller and the listing agent are asked to sign a confidentiality agreement there is no guarantee how confidential your offer will remain. If the seller should get multiple offers, they can instruct their listing agent to share your offer with another buyer and their agent for example. If a listing agent is careless, an offer may be seen by other agents in their office and should the deal not go to settlement, or that agent have a buyer interested in the same property the details of your offer might be known to another buyer.
What you can be asured of on my part, is that even if I have another client who wishes to make an offer on the same house, another form of dual agency arises. I will not disclose I am making an offer already on the same house, nor can I let you know I am making another offer on the same house with another client or the details of those offers, so you both have the benefit of confidentiality. So far in my career, I have come close to this happening, but it has never actually happened.
Interestingly what many don't realize, this confidentiality goes beyond settlement, other than for public record information. Anything you share that is personal or of a financial nature is confidential if you have an agency agreement, for ever. That is good to know.
If you have any questions about agency or buying or selling a house please contact us.
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