WHY EVERY HOME BUYER SHOULD USE A BUYER'S AGENT
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:
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Whether the seller would accept a lower price.
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The seller's reason for selling and timetable.
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How long the home has been on the market.
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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 but it at the right price.
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 your're relocating or unfamliar 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 or currently are 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.
CAN A SELLER'S AGENT (OR SUBAGENT) HELP ME BUY?
Without a buyer's agent, you're really on your own. Keep in mind, the seller's agent or subagent 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 purchase.
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 or subagent, 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 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 workds 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 offering price.
WHO PAYS THE BUYER'S AGENT'S FEE?
That depends. Surveys show in most instances buyer's agents are paid like seller's subagents; that is, buyer's agents generally receive a share of the sales commission built into the list price Many listing agreements between 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 subagent 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!"
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 agent.