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Why Do I Need A Buyer Agent?
Buying a home is probably the most important purchase you'll ever make. Do you want to go alone?
Until a few years ago, home buyers had no choice. They decided upon the home to buy and negotiated the contract without representation.
Traditionally, all residential real estate agents represented the home seller. That was true of the "listing agent" who put the home up for sale, as well as the agent who found the buyer. The agent -- who helped the buyer find the right home -- actually worked for the seller as a "subagent" of the listing agent. Under the 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 buyers 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 Agent Help Me?
A buyers agent usually offers certain duties to the home buyer, such as care, confidentiality, full disclosure and accurate accounting. These responsibilities are defined by state laws, the REALTORS(tm) Code of Ethics, general principles of agency and court decisions.
That's the legal definition. But what does the buyers agent actually do for the home buyer? Like other agents, the buyers agent will show the buyer available homes, point out the properties features, provide financing information and submit the offer to purchase.
But that's not all. As your representative, the buyers agent will share valuable and essential information if the agent knows it, such as:
- Whether this seller would accept the lower-priced
- This seller's reason for selling and timetable
- How long the home has been on the market
- Previous offers and counter offers for the property
- Strengths and weaknesses of the property
Most important for many buyers, you can ask the buyers agent for advice and assistance in setting your offering price and structuring the other terms of your offer. What's more, you'll have piece of mind knowing an advocate is working on your behalf to help you buy at the best possible terms. The buyers agent's goal is to help you buy the home you want -- and buy at the right price.
Who Needs A Buyer's Agent?
If you want to make sure you buy smart, you need a buyers agent. If you're a first-time buyer, you're relocating or unfamiliar with the local real estate market, your buying for investment and want negotiating help, or if you need to purchase anonymously, he'll be best served by a buyers agent who puts your interests first.
Also, if the real-estate professional helping you find a home is a relative, close friend, or businesses associate or you previously were the buyers home-selling client, chances are you'd expect the agent to represent your interests and should establish a buyer agent 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 the buyers agent, you're really on your own. Keep in mind, this seller's agent or subagent is actually working for the seller and is the seller's legal representative. Yes, the sellers agent or subagent can offer buyers some services, including a diligent search to find the right home, an explanation of valuable financing, calculation of monthly payments, estimation of settlement costs, and presentation of your offer to buy.
What the sellers agent cannot do is to disclose information not in the best interest of the seller such as an opinion of the homes in real value or what price and terms the seller would accept.
By law, the sellers agent or subagent 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 sellers 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 buyers agent?" Purchasing a home without representation is possibly the biggest financial mistake you can make.
The buyers 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 for you can cost you plenty. With a buyers 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 buyers agents are paid like Sellers subagent's; that is, buyers agents generally receive a share of the sales commission built into the list price. Many listing agreements between seller and sellers agent indicate whether this sales commission will be split between the sellers agent and a buyers 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 buyers agent that shares the commission.
There are, however, other ways buyers agent's may be paid. Be sure you understand from the start -- before you commit to a relationship with a buyers agent -- how the buyers agent will be paid.
Remember, the question you really need to ask yourself is: "Can I afford to buy a home without the buyers 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 buyers agent.
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