Are you familiar with how fiduciary agency laws work?
It varies in every state.
It’s important to know that in Tennessee, verbal contracts aren’t enforceable. All contracts have to be written and bilaterally signed by both parties. This is true in negotiations for a property and it’s also true in establishing representation.
In house hunting, the seller already has a fiduciary – someone with whom they’ve signed a listing representation agreement. That agent has promised to always place the seller’s interest first. That’s why it isn’t always the best idea to call listing agents directly whereby you might reveal too much information about your position or motivation.
As a buyer in the market, it’s highly advisable that you have your own representation. We recommend aligning yourself with a representative early in the game. Once you’ve established rapport, confidence, and trust with a Realtor, simply sign an Exclusive Buyer Agency Agreement (or EBA) with your agent of choice. It’s a simple form, provided by the state, that outlines duties, expectations, definitions, and timelines with regards to representation.
Key Points About Agency in Tennessee
- Agency relationships can never be implied by words or unilateral disclosures.
- A licensee is always a facilitator by default and remains a facilitator until a bilateral written agency relationship is established.
- Most offices in our area practice Designated Agency whereby only one licensee (to the exclusion of everyone else in the office, including the managing broker) hold the agency relationship.
- An agency relationship is not required in order for a licensee to receive a commission.
- Sub-agency and Dual-agency are technically legal but rarely used due to increased liability.
At Brokers Cooperative, we do not require a signed EBA in order for us to start working for you, but clients who do officially hire us, enjoy a number of perks. Coming Soon scouting is seen by many as the most beneficial. Eight of our 50 most recent transactions started off-market. That’s significant. We do everything we can to seek out opportunities for our clients by scouting private, “pocket” listings from our colleagues and database.
What Does Buyer Representation Cost?
Nothing. When an agent lists a property in MLS, they are also advertising to compensate a cooperative broker. Our fees (and theirs) is already baked right into the price. Without representation, the listing agent keeps it all. With representation, we split it. Some companies may also charge an extra “administrative fee”, but we never charge admin fees at Brokers Cooperative.
Disclaimer: The REALTOR® Code Of Ethics promises fairness and basic competency to members of the general public. But beware – not all licensees are REALTORS®. Only agents who are due-paying members of the National Association of REALTORS® have signed and abide by the official Code of Ethics.