Buying a home is one of the most important financial decisions you will ever make in your life. With the the increase of buyers in the Myrtle Beach real estate market, I have seen more first time home buyers searching for property. With that said, I wanted to take a moment to explain South Carolina agency and Buyer’s agency.
The overall concept of agency is basically the same for almost all states. However there may be a few minor differences. In South Carolina, you have the ability to choose to either be a customer or client.
As a customer you have chosen to represent yourself throughout the transaction. You have the freedom to work with any real estate agent you wish. However, in South Carolina, an agent is only required to do the following for customers:
- Present all offers in a timely manner
- Account for all money or other property received on your behalf
- Provide an explanation of the scope of services to be provided
- Be fair and honest and provide accurate information
As the State of South Carolina Agency Disclosure Brochure states: “Unless or until you enter into a written agreement with the Company for agency representation, you are considered a “Customer” of the Company, and the Company will not act as your agent. As a customer, you should not expect the Company or its licensees to promote your best interest, or keep your bargaining information confidential.”
As a Client you will receive more services than customers. To receive the added services you will need to enter into a written buyer agency contract with a Company. Once you sign the agreement, you are a Client of that Company and will receive the following services in addition to those you have as a customer.
- Reasonable care and skill
- Advice, counsel, and assistance in negotiations
When it comes to the exclusive buyer agency contract, many become uncomfortable signing a contract that requires them to work exclusively with one agent throughout the transaction. Also, they feel that if they sign the agreement it will cost them more money. This is a common misnomer in real estate. In the buyer agency contract there are four options in section 5 that discuss how the broker will be compensated.
The first is for a flat retainer fee. While there are some agents that will pick this option, it is very uncommon. The second option is to be paid a service fee. Once again, this is not a common practice in the Myrtle Beach area. The third and fourth options are the more common practices in which the broker is compensated a percentage or amount that comes from the transaction.
When a seller agrees to list their home for sale, they agree to pay a certain percentage to the listing agent and the agent who bring the buyer. This amount has already been agreed upon between the listing agent and seller. In this instance, it does not cost the buyer any money to have buyer representation in the purchase of the home. Their agent will be paid by the seller at the time of closing.
Knowing that it does not cost you any more money to have representation, if you were given the choice to be a Client or a Customer which would you choose?