The Truth About Buyers' Agency
Does the Broker Work for You?
As you begin your search for a home there are several things you need to know. One of the most important real estate concepts is the Law of Agency, also referred to as Agency. There are many reasons why this is important for you to know.
First and foremost, you may think that a Realtor is working for you and your best interests when in fact they may be working for the seller. If you are working with a realtor who represents the seller, that agent is obligated to forward any and all confidential information about you to the seller.
In many cases this information can cost you a lot of money. Giving the seller privileged information would give them an unfair advantage in negotiating with you. Such as how much you are willing to pay for a home.
What can you do to Protect Yourself?
You can enter into a contractual agreement between you and a Realtor that binds them to represent you and your best interests. This is referred to as Buyers' Agency.
Your Realtor or buyer's agent is now obligated to work toward the best outcomes for you and to hold your personal information confidential. A buyer's agent is duty-bound to you. You in return will owe them loyalty, which means you will work only with them.
Another misconception that many buyers have is that it if working with one agent is good, calling several would be better.
In reality, though, agents that suspect you are working with more than one realtor will not devote themselves to your best interests. Like most business professionals, realtors have a limited amount of time and resources.
In order to provide the best service to all their clients, realtors must invest in and choose to work with clients they feel will be loyal customers throughout the buying process.
A good Buyer's Agent will do many things for you:- They should explain the law of agency at your first meeting.
- The agent will provide you with an education in real estate and homebuying, explaining things so you can understand them every step of the way.
- The agent will invest whatever time is needed to help you.
- The agent will have an initial meeting with you prior to looking at homes to analyze your personal situation. This includes finances, credit, and the wants and needs you have for housing.
- After analyzing your financial situation they will suggest a specific price range of homes for you, this will keep you from spinning your wheels.
- If you are new to the community the agent will help you to become familiar with the area.
- They will always be watching the real estate market for a home that may be right for you.
- Sometimes the agent will have seen the listing before you so that they can screen the ones that do not meet your criteria. This will prevent you from seeing homes you will have no interest in.
- Your agent will schedule all showings and appointments. This will include homes listed with other agencies, builders, for sale by owners, open houses and any other homes that may apply.
- When looking at homes you will find homes that may fit your needs but more specific information may be needed (such as age of roof) that may not be readily seen. The agent will do all the research required.
- When you find a home you are seriously interested in the agent will sit down with you and figure out how you could buy it.
- Preparation for the financing is a lot of work. The agent will work closely with you to help you through it.
- Of course they will be negotiating for the purchase of your new home. The agent will explain the differences between what you want and what the seller wants. The broker will negotiate on your behalf until you and the seller reach a meeting of the minds.
- The most time-consuming of the agent's time is keeping track of all the aspects of the transaction and working out anything that may arise.
- The agent will work with all the professionals it takes to make a purchase work. Home inspectors, lenders, other agents, title companies, survey companies, and closing agents are just a few.
- The agent should accompany and prepare you for the closing. They will answer any questions you may have during the closing. Of course these are just the tip of the iceberg; the agent will be doing a great deal for you.
Working with Your Buyer Agent
In working with your Buyer's Agent expect to sign a contract that clearly shows they are working for you. You may be asked for a nominal retainer to compensate for the time invested; usually the retainer is credited toward your closing costs. If no property is bought the retainer may be forfeited to the realtor for their time in helping you.
How are Buyer's Agents compensated following the purchase of a home?
In theory, the buyer who works with a broker should pay for the service. In real life, though, a transaction fee is assessed in the seller's closing costs. This fee contains the compensation that will go to both the seller's realty company and realtors--and the buyer's realty company and your buyer's agent.
Buyers' Agency is often misunderstood, yet it is one of the best ways
to ensure a successful outcome in the purchase of a home or property.
Being informed is the best way to avoid surprises and unrealistic expectations
when it comes to buying a home. Visit our expenses
page to find what costs you can expect to pay as a buyer.
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