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Why
Every Homebuyer
Should Engage
a Buyer's Agent!
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Q What Precisely is a Buyer's Agent?
A In a real-estate transaction a 'buyer-broker' or 'buyer's agent' is a real estate agent who
represents only the buyer in negotiations and proceedings.
Q Why Should You Have a Buyer's Agent?
A It is not realistically possible for one agent to represent the best interests of both parties
to a real estate transaction. Buyer and seller have totally incompatible interests.
Listing agents exclusively representing the seller are contractually obligated to
represent the seller's best interests. This includes an obligation to share with the
seller such information that you, as prospective buyer, may provide.
For example, you tour an 'open house' and inform the listing agent that you are seeking a home-purchase up to $450,000, perhaps a bit over that figure. As the listing agent representing the seller, he or she is obligated to communicate this information to the seller. It is clearly not in your best interests, however, to essentially reveal to the seller what your 'top price' might be - or any other vital information that you might not wish the seller to know.
The buyer's agent, on the other hand, has no such obligation, other than to serve the best interests of his or her client - the buyer.
A buyer's agent also provides comprehensive information on every re-sale property listed within regional multiple-listing databases. From a buyer's agent you would receive completely objective counsel on the positives and negatives of each home that might be of interest to you.
You will receive objective information regarding recent sales of similar residences to enable you to better judge the value of properties that you might be interested in viewing. You will also learn precisely what the seller paid and currently owes on the property being offered for sale. This could be vital information in assisting the framing of an offer that could reasonably be acceptable to the seller.
The buyer's agent, therefore, represents your interests throughout the transaction, from negotiations through inspections, right up to close of escrow.
Q How Does this Differ from Other Real Estate Buying Methods?
A Listing agents traditionally advertise their listings to attract enquiries from prospective buyers. When buyers respond to their ads or meet the seller's exclusive agent, say at an 'open house', the buyer is seen as a potential customer to whom the agent hopes to sell that property - or another property that the agent may also have as a listing. If you are not represented by your own agent at that time, the seller's agent most often ends up representing both you and the seller in the transaction.
The listing agent, therefore, becomes a mere 'transaction broker' and cannot vigorously represent both you and the seller in the transaction.
With a buyer's agent, as the property buyer, you are owed by your agent a fiduciary responsibility to represent only your best interests. A buyer's agent seeks to locate the best residence for each buyer - i.e. a home that matches all important criteria that you have established - not to sell to any buyer a particular listed home.
Q Can a Buyer's Agent Show me Every Home for Sale?
A Your buyer's agent will show you any and all homes listed within the MLS. Additionally, your buyer's agent will seek out and investigate all properties that fit your home-buying criteria, including new development communities of single-family-homes, custom-built homes, villas, condominiums and luxury townhouses.
Q Should I Represent Myself and Deal Directly with the Seller's Agent or Even the Seller?
A This is, of course, an option. But there is no benefit in handling a transaction in this manner and may even end up costing you more.
Any seller who has listed their property for sale with a listing agent has already agreed to pay a commission to any agent representing a buyer of that property. If you have no agent representing your interests, the entire commission is paid to the seller's listing agent. As no-one is looking out for your interests this can, in the long run, turn out to be a costly situation for you as the buyer.
As far as dealing directly with the seller is concerned, that is a situation with potential difficulties and one that might find you and the seller in contention. There are many reasons for this, not least of which is that someone needs to know the applicable rules of buyer and seller disclosure - of vital importance to you as the buyer as well as many other facets of what is often an intricate and complicated transaction.
As the buyer, you will want to be certain that all 'i's are dotted and 't's are crossed before handing over a substantial sum of money to someone previously unknown to you.
Q What Does it Cost to Use an Exclusive Buyer's Agent?
A Typically it costs nothing. Half the commission the seller has agreed to pay to the listing agent is allocated to the agent representing the buyer. This is an inherent feature of membership of the MLS. Similarly with regard to new-home and condo developments and communities where buyer-agent fees are paid directly by the developer.
With properties listed as 'for-sale-by-owner', private home-sellers are also often willing to co-operate by paying the appropriate commission to the buyer's agent. Even if not, the diligent buyer's agent will often save their clients more than any commission through skilled negotiations, not merely as regards the selling price but also when inspection items and resulting repairs need to be addressed.
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