THINKING OF BUYING?
What Every Buyer Should Know
Just as your family physician would refer you to a cardiac specialist if you needed open-heart surgery, the real estate industry has evolved to the point where home buyers are well advised to seek out a specialist who will actively work on their behalf.
Buyers often look at an MLS Internet site, in the newspaper, or simply do "drive-bys" to find home. Buyers will then usually call the Realtor whose name is on the sign or in the ad.
BEWARE: In most cases, the Realtor you would be dealing with is either the agent or sub-agent of the Seller and is legally obligated to get the best price and terms for the Seller ... not you! Also, they are not likely to tell you about the other properties that may be superior to their listing. You are really on your own.
What is a Buyer's Agent? A Buyer's Agent is your advocate. They represent your interest only and owe their loyalty and trust to you only.
What are the benefits of Exclusive Buyer's Representation?
-
Loyalty - The Buyer's Agent must act in your best interests
-
Disclosure of all material facts - Seller's financial condition, property's true worth, legal effect of important contract provisions and much more
-
Confidentiality - All discussions, facts or information
-
Accounting - Reporting where earnest money is placed
-
Reasonable skill and care - From assistance on determination of purchase price to discovering material facts and disclosing them to the Buyer investigating the material facts related to the sale
What services does a Buyer's Agent provide you?
-
Help you identify the most important features for your new home
-
Create a profiled search to help you find your special home
-
Show you available homes
-
Point out the property's features
-
Assist in narrowing your choices for your new home by providing a comprehensive Comparable Market Analysis ("CMA") on your chosen properties
-
Provide financial contact information, as well as guidance towards inspections, critical time lines and due diligence dates
-
Assist you in structuring your offer and/or counter-offer
-
Accompany you to a smooth closing and coordinating any last minute details
-
Lastly, your agent's loyalty and trust during and after the sale
But that's not all. As your representative, a Buyer's Agent will share valuable and essential information with you if the agent knows it, such as:
-
Whether the Seller would accept a lower price
-
The Seller's reason for selling and timeframe
-
How long the home has been on the market
-
Previous offers and counter-offers (if known) for the property
-
Strengths and weakness of the property
More importantly, for many Buyers, the fact that you can ask a Buyer's Agent for advice and assistance in setting your offering price and structuring the other terms of your offer. In addition, you will have peace of mind knowing an advocate is working on your behalf to help you buy at the best possible terms.
Who needs a Buyer's Agent? If you want to make sure that you buy smart, you need a Buyer's Agent. If you are a first-time buyer, if you are relocating or unfamiliar with the local real estate market, if you are buying for investment and want negotiating help, or if you need to purchase annonymously, you will be best served by a Buyer's Agent who puts your interest first.
Can a Seller's Agent help me buy? Without a Buyer's Agent, you are really on your own. Keep in mind, the Seller's Agent is working for the Seller and is the Seller's legal representative. A Seller's Agent cannot disclose information that is not in the best interest of the Seller, such as an opinion of the home's real value or what price and terms the Seller would accept. By law, the Seller's Agent must negotiate on behalf of the Seller and may not withhold from the Seller information that could strengthen their bargaining position. That means you, as a Buyer, should be careful not to disclose to the Seller's Agent any financial or personal information that could be used against you.
Also too, if you inquire about a property without the assistance of a Buyer's Agent, one of two things will happen. You will be treated by the Seller's Agent as a customer ... not a client. The loyalty is to the Seller. Or, they will have someone else in their office represent you. Thus, they picked your agent ... not you!
Many Buyers incorrectly believe that if they don't use a Buyer's Agent, they can get the Seller to give them a 3% discount in lieu of paying the full 6% commission to the listing agent. This is almost always wrong. A Seller enters into a listing agreement with the listing broker for an agreed upon amount or percentage. Once the property is listed in MLS, that fee is shared with any agent that sells the property. If, however, the listing agent sells it without another agent, the listing agent gets the full 100% agreed upon fees. That means not only did you not get a discount equal to the shared fees, but you are also letting the Seller have an advantage in negotiation by having an agent represent him/her.
What will a Buyer's Agent cost me? Not a penny! The Seller pays the agents's fees through the commission their agent shares with your agent. Perhaps the right question is, "What will it cost me if I don't use a Buyer's Agent?" Purchasing a home without representation is possibly the biggest financial mistake you can make. A Buyer's Agent can guide you each step of the way to prevent costly errors. Failure to find out about defects in the property or the actual value of the property can, of course, be an expensive mistake. And failure to negotiate a contract that works for you can cost you plenty. With a Buyer's Agent, you can ask for and receive advice and assistance in selecting the best proeprty and determine an offering price.
Is it true that a Seller or Builder will discount the price of the home if I don't have an agent? This is a common misconception. The brokerage fee (or commission agreement) is a totally separate agreement than the sales price of your home. The commission structure doesn't change even if the sales price of the house is negotiated at a lower price. The listing office receives the same commission rate, just at a lower price.
The Bottom Line. If you want an agent to fully represent your best interests, if you want help in evaluating a property, if you want someone to negotiate the deal to get you the best price and on the best terms, or if you want to purchase a home in what's becoming the most popular way to buy, you will want to enlist the aid of a Buyer's Agent.
What do I have to sign to receive this representation? It's called an Exclusive Buyers Agency Agreement. The time frame for representation is negotiable.
So once I sign this agreement I will get exclusive representation from start to finish and will probably cost me nothing? Yes. Signing an Exlusive Agency Agreement is the best investment you can make. If you are serious about buying a home, you need serious representation in finding one. This agreement is the best and safest way to accomplish your home buying goals!
DON'T GO UNREPRESENTED!
|
