When I am speaking for the first time with potential buyers, one of the most misunderstood aspects of buying a home concerns buyer representation, as many people still do not understand that, as buyers, they have the right to have an agent who solely represents their interests. Here are some of the most common questions about buyer representation. I hope this will clear up WHY you need buyer representation!
What is buyer representation?
When you agree to work with a buyer’s agent, you have the benefit of someone representing your best interests and negotiating on your behalf. The agent has a fiduciary responsibility and pledges to you loyalty, confidentiality, obedience, accountability, reasonable care, and diligence. These are not just words; you have an agent that helps you through every step of the transaction and puts your interests above everyone else’s, including her own.
Can’t I just call the agent whose name is on the sign in front of the house?
You can call that agent, but you must remember that he/she is representing the seller and will work in the seller’s best interests. The agent can show you the house, and you must either consent to being represented as a Customer (with limited representation) or Multiple Representation. If you choose to be a Customer, you must sign a paper that says that you understand that the Listing Agent is limited in what she may share with you; for example, she cannot discuss price or her seller’s reason for selling. If you want the agent to represent you, both you and the seller must sign papers that you agree to dual representation, and the agent will do his/her best to represent both parties fairly. A third option is that the agent can assign another agent from her broker’s office to represent you, in which case you will have someone else representing you from the same brokerage, and this is still considered Multiple Representation. But my question to you is: Why would you not want to select your own agent who works just for you?
Won’t I get a better deal if I go to the listing agent?
This is a misconception that persists among novice (and even NOT so novice) buyers. Some people think that an agent will talk the seller into accepting a lower offer if that agent has both the buyer and seller because the agent will be getting all the commission. The reality is that the agent may be representing both parties, but the people in control of the final outcome are the seller and the buyer. If the seller doesn’t want to accept your offer, it isn’t going to happen. I have even seen cases where the buyer paid MORE than the asking price, due to pressure they felt during the negotiations. If you, the buyer, don’t want to agree to the terms, it isn’t going to happen either. Wouldn’t you rather have an agent who will negotiate fully on your behalf so that you don’t have to worry about where someone’s allegiance lies? I always liken this to asking people if they would hire the same lawyer to represent them and the “other side” in a law suit. If your answer is “no”, then it should apply here as well, where one agent is looking to get the highest price possible (the listing agent), while the other agent wants the lowest price possible (the buyer’s agent). Their clients’ missions are at complete odds and should be represented exclusively and fairly.
Can you show me properties that aren’t your listings?
Yes! I can show you any property that is listed on MLS. When the sellers list their homes for sale, they agree to pay the buyer’s agent if they sell the home. If you see a property that interests you, just let me know and I will arrange for us to see it.
How much does buyer representation cost?
In 99.9% of the cases, the commission is paid by the seller, so buyer representation costs you nothing. I have never had an instance where a buyer has paid my commission, even with Private Sales or FSBO’s. The buyer representation agreement, however, will spell out that you will be responsible for my commission if the seller does not pay. But two things are important here: First, it is extremely rare; and second, we generally know ahead of time if there are any issues with the commission.
Do I have to sign anything?
Yes, our agreement is called The Buyer Representation Agreement and it outlines what each of our responsibilities are. When we meet, I will go over each section of the agreement so that you understand it, but essentially is says that for a period of time we will work together in an agency relationship and that I will represent you in the purchase of your new home or land. You agree that you will use me exclusively as your agent and will let others know that you have signed a buyer representation agreement. This protects you, me, and other agents by letting them know that we have an exclusive relationship.
How long do I have to sign the agreement for?
The period of time that we are under agreement is negotiable. I want our relationship to be a mutually satisfying one, and I believe that we should both want to work together. For that reason, I encourage you to select a period of time that you feel comfortable with. If you don’t want to sign a long agreement at first, that’s fine with me; there are other options we can explore and assuming all goes as we intend it to, we can always extend it later if we both agree.
Call/email me with any other questions you may have. I can’t WAIT to get started “moving you forward”!