Accredited Buyer Representative
"Why Do I Need A Buyer's Agent?"
Buying a home is probably the most important purchase
you'll ever make. Do you want to go it alone? Until a few years ago,
home buyers had no choice. They decided upon a home to buy and
negotiated the contract without representation.
all residential real estate agents represented the home seller. That
was true of the "listing agent" who marketed the home for sale, as well
as the agent who found the buyer. The "selling agent", who helped the
buyer find the right home, actually worked for the seller. Under that
traditional system, all agents were legally bound to represent the
seller and the buyer had no representation.
Now, Buyers Have A Choice.
Buyers no longer need to
represent themselves during the home search and purchase while all
agents represent the seller. Smart home buyers today can receive
undivided confidential representation by choosing a "buyer's agent."
In fact, 71 % of home buyers surveyed in a recent Gallup
poll for the National Association of Realtors said they would use a
buyer's agent next time they purchased. At last, you don't have to buy a
home alone. Now you, like the seller, can have someone on your side
looking after your best interests.
"How Can A Buyer's Agent Help Me?"
A buyer's agent usually
owes certain duties to their home buyer, such as care, confidentiality,
full disclosure and accurate accounting. These responsibilities are
defined by state laws, the REALTORS® Code of Ethics, general principles
of agency, and court decisions.
That's the legal definition. But what does a buyer's agent
actually do for the home buyer? Like other agents, a buyer's agent will
show the buyer available homes, point out the property's features,
provide financing information and submit the offer to purchase.
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 timetable;
How long the home has been on the market;
Strengths and weaknesses of the property.
Most important for many
buyers, you can ask a buyer's agent for advice and assistance in setting
your offering price and structuring the other terms of your offer.
What's more, you'll have peace of mind knowing an advocate is working on
your behalf to help you buy at the best possible terms. A buyer's
agent's goal is to help you buy the home you want - and buy it at the
"Who Needs A Buyer's Agent?"
If you want to make sure
you buy smart, you need a buyer's agent. If you're a first-time buyer,
if you're relocating or unfamiliar with the local real estate market,
if you're buying for investment and want negotiating help, or if you
need to purchase anonymously, you'll be best served by a buyer's agent
who puts your interests first.
Also, if the real estate professional helping you find a
home is a relative, close friend, or business associate or you
previously were the agent's home-selling client, chances are you'd
expect the agent to represent your interests and should establish a
buyer agency relationship. Or, if you just want to get the best value
in a property and an agent, you owe it to yourself to be the most
knowledgeable buyer you can be.
"What Can A Seller's Agent Do To Help Me Buy?"
Without a buyer's agent,
you're really on your own. Keep in mind, the seller's agent is actually
working for the seller and is the seller's legal representative. Yes, a
seller's agent can offer buyers some services, including a diligent
search to find the right home, an explanation of available financing,
calculation of monthly payments, estimation of settlement costs,
presentation of your offer to buy.
What a seller's agent cannot do is disclose information 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.
"What Will A Buyer's Agent Cost Me?"
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 identify 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 property and determining an
"Who Pays The Buyer's Agent's Fee?"
That depends. Surveys
show in most instances buyer's agents are paid like seller's agents;
that is, buyer's agents generally receive a share of the sales
commission built into the list price. Many listing agreements between
home seller and seller's agent indicate whether the sales commission
will be split between the seller's agent and a buyer's agent. That's
because most sellers are prepared to pay a commission simply to get
their home sold. They aren't concerned whether it's a seller's agent or
a buyer's agent that shares the commission.
There are, however, other ways buyer's agents may be paid.
Be sure you understand from the start, before you commit to a
relationship with a buyer's agent, how the buyer's agent will be paid.
Remember, the question you really need to ask yourself is:
"Can I afford to buy a home without a buyer's agent?" For most home
buyers today, the answer is "NO!"
"What Is An 'In-Company' Situation?"
Sometimes the home a buyer
wants to purchase is listed by the same agent who is representing the
buyer or by another agent from the buyer's agent's real estate
company. In that case, the buyer's agent's ability to fully represent
either the buyer or the seller may be limited. The resulting
relationship goes by different names in different parts of the country,
for instance, "designated representative," "transaction broker,"
"facilitator," or "disclosed dual agent." State statutes and common law
determine how an "in-company situation" is handled.
If an "in-company
situation" occurs, it must be properly disclosed to both buyer and
seller who then give written informed consent to modify the agency
relationship. Each state may vary in what is specifically required of
the agents. In some states, an "in-company" situation can exist where
different sales associates of the same brokerage firm each fully
represents exclusively the interests of their own client- the buyer or
the seller- in an in-house buyer agent transaction. Be sure to ask how
your buyer's agent handles in-house listings. An "exclusive buyer's
agent" has no listings and thus avoids the limitations of an
The Bottom Line
If you want an agent to
fully represent your best interests; if you want help evaluating a
property; if you want someone to negotiate to get you the best price and
the best terms; if you want to purchase a home in what's becoming the
most popular way to buy, you'll want to enlist the aid of a buyer's