Buyer Agency
What is buyer/broker agency?
Invented in the late ’70s and still kind of a hush-hush item in the industry, “Buyer Agency” (also known as “Buyer Brokerage”) is when a real estate agent or broker enters into a contract to represent the buyer in the purchase of a home or property.
In the old days, people just called the agent on the sign, unaware that the agent’s fiduciary duties lie with the seller of that property. Now buyers have the option of choosing a buyer’s representative who is contractually bound to the their fiduciary interests including: fidelity, honesty, dedication to purpose, and always acting in their best interests.
What are the advantages?
Simple: the agent with the sign in the ground represents the seller of that property. She cannot and will not tell you all you need to know about one of the larger purchases of your lifetime.
Conversely, your buyer’s agent should:
- tell you everything he or she can find out about the seller and reasons for selling
- point out the negative aspects on each property, not just the positives
- tell you if the listing is overpriced
- deduce whether or not you will be able to resell the property for a profit
- know immediately if it’s a good candidate for a short-term rental program
- offer a wide variety of comparables to preview, not just their agency’s listings
- help you formulate an offering price and negotiating strategy and represent you like an attorney all the way to the closing table
A good buyer’s agent won’t stop showing property until you find the right one. You won’t waste your time driving around with agents that only show their own listings; a good buyer’s agent will show them all without prejudice–any agent, any company. Without a buyers’ rep helping you get the right house at the right price and terms, you might buy a second home that perhaps isn’t marketable to what buyers (or renters) want in this area.
What’s the cost?
There is no additional cost to entering into a contract for a buyer’s agent to represent you. If you buy from the listing agent, she gets all of the commission that the seller is paying; if you’re using a buyer’s agent, that commission is split 50-50 between the two agents.
Am I obligated and what are my rights?
You are only obligated if you do not terminate the agreement prior to buying from another Realtor.
What do I need to do?
Call me today at 706-455-2274; it’s a little easier to explain over the phone. Even if you use another agent, you should always request and sign a “Buyer’s Agency Agreement” before you get in the car. It’s there for your protection!
related links:
realtor.com - who respresents you?
I AM INTEREST IN A SMALL LOG CABIN IN THE MOUNTAIN AREA FOR MY MEDITATION PRACTICE.
CHARLES SHIN
Shelley: I am a strong advocate for Buyer’s Agency. Your comment about a good buyer’s agent won’t stop showing property until they find the right one. I might add that a good buyer’s agent will always keep the client’s best interest first, always.
Thank you Donna. I apologize for taking so long to approve your comments. My blog post notification mails were going into my spam folder. Thanks for the comments. See you around town, Shelley.
One helpful correction:
Buyer agency didn’t start in the ’90s. It goes back at least to the late 70’s on the coasts.
What gave it a boost was the FCC report that came out in 1983 on all the lies in the real estate industry. At that point states started mandating agency disclosure forms. That pushed the industry to start telling home buyers the truth!
By 1993 about 44 states had agency disclosure laws. And once real estate agents started telling the truth the public got interested in buyer agency.
Regards,
Jon Boyd
Exclusive Buyer’s Broker
Past President of The National Association of Exclusive Buyer Agents (naeba.org)
The Home Buyer’s Agent of Ann Arbor, Inc.
Thank you for the correction Mr. Boyd, duly noted. And thanks for commenting!