Hiring a Buyer’s Agent
The buying process has changed a lot over the years! With real estate listings readily available online, more people are attempting to go through the buying process on their own. To quote msn.com, “Many experts say this is a bad move — worse, for example, than trying to sell a house without an agent. For one thing, in most cases, a buyer doesn’t pay an agent; the buyer’s agent splits the commission with the seller’s agent, so the services are essentially free to the buyer. Also, a buyer’s agent can usually access historical price data for home sales in the area, which means the agent can recommend a bidding strategy that targets comparable properties that sold for less, rather than the midrange.” John Vogel, adjunct professor of real estate at the Tuck School of Business at Dartmouth College, calls going through this process alone “a mistake.”
The details involved in buying a home (particularly the financial ones), can be absolutely mind-boggling. A buyer’s agent can help guide you through the entire process and make things far easier for you. Buyer’s agents are well-acquainted with all of the important things that you’ll want to know about a neighborhood or community that you may be considering – whether it be schools, safety, traffic, age demographics, etc. A buyer’s agent can also help you determine what you can afford and scour through the MLS to find the types of homes that you’re going to want to see. Buyer’s agents also have immediate access to homes as soon as they’re put on the market, so you don’t have to waste hours setting up viewings or driving around.
If you’re considering buying a short sale, foreclosure, or new construction, the processes for buying these types of homes is vastly different than a traditional sale, and a buyer’s agent can be there to guide and educate you throughout the process, ensuring that you end up with the best deal.
When the actual time comes to make an offer on a home, a buyer’s agent can point out ways to structure the deal to save you money, and when it comes to negotiating on the purchase of a property, there’s no substitute for a professional. A buyer’s agent can help explain the benefits or drawbacks of different mortgage types, guide you through the paperwork, and be there to hold your hand and answer all of your questions (even the last minute ones), from start to close. And the best part… in most cases, you don’t pay the broker anything. The payment comes from the seller!
The real hard work starts AFTER the ideal home is found, not before.
Who Pays a Buyer’s Agent?
The buyer’s agent is paid by the SELLER.
Who Does the Buyer’s Agent have a Legal Responsibility Towards?
When you hire a buyer’s agent, that agent’s fiduciary responsibility is directly to YOU. This means that your agent has a legal obligation to put your interests as a buyer before anyone else (including the agent’s own), and your agent must provide you with any important information he or she has that affects your home purchase.
Who Does the Selling Agent Have a Legal Responsibility Towards?
The selling agent is the agent representing the seller of the home in the transaction. Many times, buyers will contact sellers or seller’s agent directly assuming that they will net a better deal on the property. The seller’s agent has an exclusive fiduciary duty to the seller. They are contractually obligated to make the sale happen in the seller’s favor, often as close to the listing price as possible.
Still, can’t I save on commission by going it alone?
Many people are under the impression that they can save money by dealing directly with a listing agent. They perceive that they’ll be able to save themselves about half the commission (usually 2%-3%). In some cases, buyers may save themselves a few dollars, but it definitely won’t be anywhere near 3%. When a listing agent represents a buyer, they are increasing their workload and their liability, so they’re almost never willing to simply cut their commission in half. Lastly, the fiduciary responsibility of the listing agent is still to the seller! They’re not going to negotiate on your behalf to get you a better price.