- Buyer's Agent
Another change in the real estate industry in the past several years has been the growth
of the buyers agents. Many consumers initially resist when presented with the option
of retaining a buyers agent and signing yet another contract. This resistance has
more to do with a lack of understanding of the role of a buyers agent than it does
with an actual dislike of the buyers agent concept.
Before the advent of the buyers agent, all real estate agents owed their fiduciary
responsibilities to the seller. The agent was responsible to the seller since the seller
paid the final commission and had signed a listing contract designating an agent to
represent them in exchange for the commission. As a result of this logic, real estate
agents involved in a transaction could only be devoted to the one side of the transaction
the sellers side! This was true even when an agent had only been working with
the buyer, and was responsible for writing and presenting the offer to purchase!
What did that mean to the buyer? It meant that if their agent knew proprietary information
about the seller that could help the buyer in formulating their offer, the agent was not
allowed to share it with the buyer. For example, lets assume that the agent who
brings the buyer knows that the seller is under great pressure to sell due to 1) a
relocation, or 2) a difficult divorce or, 3) financial pressures. Although this
information could be useful to the buyer in deciding what to offer, none of this
information can be shared under the traditional definition of agency. Likewise, if the
buyer has confided with his agent a willingness to go higher than his original offer then
in the traditional agency situation the real estate agent would be obligated to share this
information with his actual client, the seller.
It wasnt until real estate buyers began to demand fair and equal representation of
their interests that the concept of buyers agency took hold. Today you will find
real estate agents who specialize in representing buyers in most major metropolitan
markets and in the outlying areas as well.
Hiring a buyers agent does require that you sign a contract. The contract is signed
prior to services being rendered. It usually identifies a time period during which the
agent will work with you to find a house.
Service a buyers agent should provide:
- Providing detailed information on current market activity and current
- Keeping you informed of new listings that hit the market.
- Coordinating property showings and either accompanying you on the
showings or previewing properties on your behalf.
- Reviewing and explaining all pertinent legal forms and contracts with
- Researching the seller and their property to discern any problems or
unique issues that might influence your decision to make a particular offer.
- Advising you on how to write an offer and what to include in that
- Negotiating for you with a commitment to protect your best interests.
- Assisting you with arranging financing.
- Representing you by keeping your personal and financial position
confidential and being willing to offer you anonymity if requested.
- The contract will also spell out how the buyers agent will be
paid commission and/or fee. Some agents will require that a small retainer be paid up
front with the balance of the fee being paid as a commission upon the close of the sale.
- This formalizes your business relationship with the agent and also
commits the agent to servicing your real estate needs. Other buyers agents will
request they be paid a full commission out of the proceeds of the sale. The commission
usually amounts to half of the total fee that the seller has agreed to pay their listing
agent upon the close of the transaction.
- Skills a buyers agent should possess include:
A strong familiarity with the local marketplace, including recent sales, pricing trends,
and current inventory.
An enthusiasm towards the negotiation process. If you are paying to be represented during
the sale, then make sure you hire someone who is aggressive, persuasive, and excels at the
role of negotiation.
A willingness to keep you constantly updated as to properties that might suit your needs.
A commitment to show you those properties or preview them for you on your behalf.
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