A transaction broker is real estate broker who provides limited representation to both buyers and sellers in a real estate transaction at the same time. Therefore, they are not representing the best interests of either party. 

This can be a problem for buyers, who may assume the transaction broker is representing them exclusively.  When you are working with a transaction broker, it is important to be aware of the potential conflict of interest between the buyer and seller and to take steps to protect yourself.  Transaction Brokers in Florida do not have to disclose to the buyer in writing that they are transaction brokers.

Transaction Brokers can switch from Single Agent to Transaction Broker

Transaction Brokers and their associates will switch back and forth from Single Agency to Transaction Broker. This happens when the buyer calls the listing agent or when a new office listing becomes of interest to the buyer.  Usually, the buyer has provided their financial information and motivation to buy to the real estate broker.  Most buyers assume the agent/broker they call to schedule viewing a property will be representing them exclusively throughout the entire sales transaction. 

How to Protect Yourself When the Single Agency Broker switches to a Transaction Broker

If you get caught in a bait and switch, situation with a transaction broker, and are ready to make an offer on a property, it is too late to contact another broker. 

When you are under pressure to make an offer with a agent who is a transaction associate, there are a few things you can do to protect yourself:

Ask the transaction associate to include an attorney review clause in your offer. You will need 3 to 5 days to find a real estate attorney and give them time to review the contract.  The clause should allow you to cancel the contract if the attorney finds problems with the paperwork.  The attorney may recommend changes or suggest you cancel the contract prior to the end of the attorney review period or some other contingency period. 

Do not ask the seller’s agent to recommend an attorney. Instead, find an attorney who specializes in representing buyers in real estate transactions.

Be clear with the attorney that you expect them to represent your best interests as the buyer.

Most attorneys want to close the entire transaction and provide the title insurance.  That is different than representing you as the buyer.  Depending upon where you buy in Florida, the seller will usually choose the closing agent.  The closing agent may be a title company or an attorney who also keeps your good faith money in an escrow account.  Most often the title company will take the seller’s side of the transaction should issues arise.  An attorney who represents a buyer will usually coordinate transferring the buyers good faith escrow money to their escrow account.

You can wait until the seller agrees to accept your offer before hiring an attorney.  Once you receive the offer signed by the seller, it becomes a contract, and your timing for the attorney review starts.

Real estate contracts are legally binding agreements and you may have a significant amount of money at stake once you are under contract.

Working with a transaction broker can be risky for buyers. It is important to be aware of the potential conflicts of interest and to take steps to protect yourself.

WHAT IF THE OFFER MADE TO THE SELLER IS NOT ACCEPTED?

Depending upon whether or not you also signed an Exclusive Buyer Broker Agreement with the Transaction Broker, you may be free to choose the services of another broker, to continue with your property buying search and purchase. 

Florida Buyer Broker is not an attorney.  In the State of Florida, Buyer Brokers can legally represent buyers on the purchase of real estate.  They write the purchase contract, and are obligated to negotiation for the best price and terms for the buyer. Buyer brokers  have true liability in the transaction and will use much care and diligence to take care of the buyers best interest throughout the real estate sales transaction.