BENEFITS OF THE BUYER AGENCY
In an ideal world, every party in a transaction would be fairly represented. When it comes to real estate however, this may not be the case. The seller and buyer, depending on the type of agreement with the real estate professional, may not be represented equally.
Many people believe that the agent they are working with automatically represents them and their interests. Yet, without specific disclosures this is not true. Unless otherwise stated, agents represent the seller in transactions for the sale of a home. Agents, as part of his or her fiduciary duty, must ensure their loyalty protects the sellers position throughout the entire process.
This is true of the “listing agent” who puts the home up for sale, and the agent who finds the buyer. The agent – who helps the buyer find the right home – works for the seller as a “sub-agent” of the listing agent. With this system both agents are legally bound to represent the seller. The buyer has no representation.
Example 1: You respond to a home advertisement in a newspaper, magazine or internet. The agent is friendly and informative. He or she tells you what you believe to be everything about the house. However the agent represents the seller, not you.
Example 2: You are working with an agent who shows you 10 homes in a weekend. As you begin to feel comfortable with this person you begin to offer personal information. However, without a buyer agency agreement this real estate professional is really representing the 10 sellers. Any information you reveal to the agent must be relayed to the sellers. In addition, this real estate professional represents the seller, he or she cannot reveal certain things to you as the buyer, for example: The reason for selling (unless authorized by the seller) Any concessions, in price or otherwise, that the seller may be willing to give up. Any conversations between the agent and the seller. Any information detrimental to the seller, or advantageous to the buyer
BUYER’S AGENCY INSURES YOU GET THE BEST DEAL
In recent years changes to the real estate industry have been made to allow for a more equitable arrangement. Buyers are not alone. In fact, with a real estate professional working on behalf of the buyer, as a buyer’s agent, a buyer receives a full range of professional services. A buyer’s agent commits to a home buyer and provides undivided, confidential representation. This real estate professional has the tools, knowledge, industry connections, negotiating skills and seasoned experience to work for you. Many people lack these essential skills help to ensure buyers don’t over pay for a home.
HOW DOES A BUYER’S AGENT HELP YOU?
A buyer’s agent must work in a professional, ethical manner, ensuring the purchaser is treated with care, confidentiality, full disclosure and accurate accounting. A buyer’s agent will also show the buyer available homes, point out property features, provide financing information and submit the offer to purchase. If a buyer’s Agency Agreement is struck between you and the agent, it is you rather than the seller, who has the representation from the agent with whom you are working. Working under a Buyers Agency Agreement you get the following benefits:
LOYALTY
The real estate professional must act in the best interest of the buyer
PROFESSIONALISM
The agent must act in accordance with the lawful instructions of the buyer Disclosure of all material factors, such as:
- -Sellers financial condition
- -Properties true worth
- -Strengths and weaknesses of the property
- -Commission split with other brokers
- -Legal effects of important contract provisions
- -Information on property value trends that may influence a decision about a certain area
- -A buyer’s agent can develop a CMA – revealing sold prices of similar properties
- -Existence of other offers
- -Relationship between agent and other parties
- -Determining and advising about a reasonable purchase price
- -Discovering any facts that effect the purchase, and advising the buyer
Most importantly, you can ask a buyer’s agent for advice and assistance in setting the price or other terms of the offer. What’s more, you will have peace of mind knowing an advocate is working on your behalf to help you buy at the best possible terms.
The important thing is to understand options so that buyers don’t unintentionally accept less representation than they want. When you are looking to make the biggest investment of your life, it is not hard to understand why it’s important to be represented exclusively.