Buyer Representation – Don’t Buy A Home Without It…
Your home is a huge purchase. Hundreds of thousands of dollars are involved. You don’t want to do it alone and there’s no reason to. Hiring a buyer’s agent gives you an expert to work with and costs you nothing!
In a typical real estate transaction, it’s the property sellers who pay agent commissions. So, if you’re a buyer and not taking advantage of the services of a licensed agent, you’re missing a no-cost opportunity to have your best interests represented. In fact, it’ll likely cost you precious time–and even money–to go it alone for a few reasons.
But before we get into that, you’re probably wondering what most of my clients ask me at some point:“If the seller is paying the commission for both agents involved in a real estate transaction, can an agent really represent my interests as the buyer?”
The answer is a resounding YES and here’s why. A licensed agent is required by law to provide specific duties to their client, whether they’re the buyer or seller. Those duties include undivided loyalty, honesty, confidentiality, fiscal accountability, full disclosure of material facts that might influence a buyer’s decision and reasonable care and diligence. Additionally, a REALTOR® must be a member of the National Association of Realtors (NAR) and takes an oath to the REALTOR®Code of Ethics, which includes 17 points of accountability and high standards.
It wasn’t always like this. In fact, until the late 1980’s, real estate transactions involved a listing agent representing the seller and a sub-agent who brought the buyer. Both agents owed duties to the seller, but nationwide polls showed that most buyers believed their agent wholly represented their interests.
To combat this misunderstanding, state licensing regulators decided to require written disclosures that explain agent representation. As a buyer, you are required to sign a disclosure notice indicating whether you wish to be represented or not. When you decide to be represented, you enter into an agreement that binds that agent to represent your interests entirely. Although the funds to pay your agent’s commission may come from the seller side of the transaction, your agent is bound by their license and ethics to represent you exclusively.
So what exactly does a buyer’s agent do for you? Three broad categories sum up the duties an experienced and competent buyer’s agent will perform for you:
- Find suitable properties, provide analysis of the market, provide insights about specific properties of interest to you, and get you in to see properties is job #1. Yes, you can look on Zillow and other online portals to view properties—and your agent will encourage you to do that—but that’s just a start. Your agent has access to much more in-depth information than what these sites provide and can save you the time and cost of doing all that research yourself.
- Analyze, submit and negotiate offers on your behalf is another key metric provided by your buyer’s agents.Licensed agents use state- and county-approved forms and contracts that cover you legally and get your offer to the sellers in a format that’s easy to review and accept. And, without an agent’s guidance, you run the risk of either offering too little and missing the house of your dreams, or offering too much because you don’t know important facts, trends and price points at which similar homes have sold. A seasoned agent will dig deep and uncover relevant details about the property, the neighborhood, recently sold properties, the seller’s inclinations and much more and then use these facts to suggest an offer price that hits the sweet spot of getting accepted without paying a $1 more than you should.
- Guide you through the entire home-buying process and readily recommend highly-qualified, trustworthy and reasonably-priced professionals to help you efficiently and cost-effectively get things done. Agents have been there and done that, and we can recommend the best home inspectors, lenders, appraisers, handymen and others that make the purchase process go smoothly.
The bottom line is this: As a buyer, you deserve to have your interests represented by a competent, caring and licensed professional who works exclusively for you. When you start looking for a home, please understand that it is in your best interest to sign an “exclusive right to represent” disclosure with a buyer’s agent of your choosing. There’s no heroism—or cost savings—by going it alone.
Ruth Lyons is a realtor with Sachs Realty in Columbia. She’s been investing in real estate for decades and she works with both buyers and sellers. She loves demystifying the process so everyday people can buy and sell homes with confidence. You can reach Ms. Lyons at 443-745-4806 or rl@sachsrealty.com