Why Hire A Buyer’s Agent? Let me start out by saying that as someone who has spent a career in mortgages, not listing and selling real estate, I believe that I am close enough to the this topic to have a valued opinion and distant enough from it to have an objective perspective. You see, when I work with a borrower there is NO QUESTION where my loyalties and responsibilities lie. That is not always true of a real estate agent. As I talk to prospective home buyers, it is obvious that they don’t understand two significant factors as it pertains to working with an agent: 1. The benefits of a Buyer’s Agency relationship 2. The potential pitfalls of NOT having one Let me bounce some of my thoughts off you… • Most homes listed for sale have published commissions for what the listing agent and seller have already agreed to pay an agent who brings a buyer. So, in most cases, even though your contract is with your buyer’s agent, and it says you owe them a fee for services rendered, they structure the deal such that you have zero extra cost…it’s all built in. • Because they get paid when you find and close on a house, Buyer’s Agents are incented to listen to your wants/needs better and search for the best fit for you. (It helps them get paid faster and earn more referrals.) You would be shocked how many agents bring buyers to homes they know aren’t a fit because it helps the agent look good to the seller. These agents use up your time to further their own agenda. • If you were suing someone and then trying to negotiate a settlement, would you let their lawyer decide on what’s fair or would you want someone working for your best outcome? Well, when you don’t have a contract with an agent to represent you that is exactly what you are doing- negotiating with the other parties representative. (What’s worse is buyer’s often take that traditional agent’s recommendation for a lawyer too! Whose side are they on…yours or the agent who referred them?) • Disclosure of key information is another. Traditional agents have a legal obligation to protect many of the seller’s secrets (a divorce, a job relocation, a foreclosure, and more). Things you might want to know before negotiating. Your buyer’s agent can share these type of details. • You can strategize with a buyer’s agent. You can discuss making an offer lower than your “top offer” or talk about any challenges you might have in securing financing, as examples, and, unlike a traditional agent, they must keep your secrets. • I hear buyers tell me all the time that they believe they can make a better deal directly with the listing agent. While occasionally that might be true, it is not the norm. You are negotiating with a professional who will rarely cut their fee, and if they do, it simply saves the seller money and isn’t passed on in a lower price. • Buyer’s agents are also far more likely to search for properties, like For Sale By Owner Homes, because they can negotiate their commission into your offer. • Buyer’s agents also usually have a team of people who serve the buyer- a mortgage expert, a home inspector, an attorney, an accountant, a contractor and more- to help buyers deal with more than merely finding a house. There is a misconception about how pricing real estate works. Many believe the seller decides, based on their wants/needs, what they need to “net” and then they add the real estate commission on top. Hence why there are so many overpriced listings…unreasonable or unrealistic sellers. But price isn’t set by the seller; price is set by the buyer. The buyer brings the money to the closing table. It is actually their cash that pays the sellers’ wants/needs AND the real estate commissions. Yet a vast majority of those buyers are not represented…makes no sense to me. WRITTEN BY Dean Hartman
Posted on: Tue, 29 Jul 2014 17:22:44 +0000
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