Useful Information Area Links      BUYER BROKERAGE IN A NUTSHELL In residential brokerage, absent a Buyer Broker Agreement, both the Listing Agent and the agent who procures a "ready, willing and able buyer" (the Selling Agent)- represent the seller in a fiduciary capacity. While both agents have a duty to be fair and honest with all purchasers, neither has an "agency" relationship with the buyer. They cannot recommend a bid price which is less than the list price and must leave that decision up to the buyer. They cannot actively seek out and disclose the existence of matters which might adversely affect the seller's interests, although they must disclose such matters if asked by the buyer and known to the agent. This system grew up tilted towards the seller because the "seller pays the commission". If the Seller and Buyer agree that both parties to the transaction should have available to them a real estate professional who owes fiduciary duties to one party or the other - Listing Agent to the seller and the Buyer's Broker to the purchaser, then the second method, Buyer Brokerage'' should be used. The result of this arrangement is a balanced transaction where both parties have a knowledgeable agent protecting their respective, and sometimes conflicting, interests and whose ultimate goal is to negotiate a meeting of the minds, and a transaction, between the parties. Using Buyer Brokerage, the compensation structure is quite simple and does not add any costs to the transaction. A Listing Agent typically offers to split the total commission with a Selling Agent (representing the seller) on a 50/50 basis. Under Buyer Brokerage, that 50 percent is offered to the Buyer's Broker for bringing the buyer to the deal. Most sellers and Listing Agents don't care who the "other agent" represents, so long as a transaction is consummated. The buyer does not have to pass the commission. All that is needed is a signed retainer agreement (a "Buyer's Broker Agreement") between the purchaser and the Buyer's Broker. This establishes the agency relationship. At no additional cost (since the brokerage fee is already built into the list price of the property, the purchaser now has an exclusive agent. That buyer's agent has an affirmative duty to protect the purchaser's interests by negotiating the best possible price, discovering adverse factors which can either dissuade the purchaser or increase the purchaser's negotiating leverage. A buyer agent is not working for the seller or the seller's listing agent. Condo vs. CoOp First-Time Homebuyers If you are a FIRST TIME HOME BUYER in Washington DC (ie have not purchased a home in DC) then you are eligible for the federal first time home-buyer CREDIT for the amount of $5000! This is almost as good as cash ! The SALARY CAP (ie: the maximun salary allowable to qualify) is $72,000 and is pro-rated thereafter (if this cap is exceeded) to 75%, %50, %25, accordingly. For exact information, and how to get this form, please contact us or a tax adviser.