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Why Smart Home Buyer Hires a Buyer's Agent?

If you are considering buying a home, it's a good idea to give some consideration to who will represent you in the purchase of that home. While the agents you encounter while touring open houses are usually quite friendly and even eager to help, it should be understood that in most cases those agents actually represent the home sellers. This means that while they certainly have a duty to be honest and truthful to you as a prospective buyer their primary duty is to get the best possible terms and price for the home sellers.

In a buyer's market there are surplus of homes; with far more homes listed for sale than qualified buyers looking to purchase them. This gives you as the buyer a unique bargaining position. Sadly; however, many first time home buyers and even some experienced home buyers simply do not know how to get the home they want for the best possible terms and price.

Remember that in most states a home's listing agent can represent the buyer in the same transaction as the home seller. This is known as a disclosed dual agency in which the seller and the buyer both understand that a single agent will represent both parties. In some states laws allow the listing agent to represent the seller while another agent, sometimes even in the same firm, represents the buyer. The agent representing the buyer would be known as a transaction agent or buyer's broker or a buyer's agent.

When the time comes to buy a home it is important to make sure that you fully understand exactly who is representing whom in the transaction. If there is only one agent in the entire transaction it must be understood that the only options are for the agent to represent only the seller or to be working as a dual agent who represents both the buyer and the seller.

If the agent is acting as a dual agent then he or she has a fiduciary duty of truthfulness, honesty and full disclosure to both the home buyer and the home seller. That said; however, a dual agent is NOT required to disclose information such as the highest price and best terms the buyer is willing to offer and/or the lowest price and terms the seller is willing to accept.

Obviously this can create a conflict of interest that can easily develop into a situation which is difficult for even the best of agents to handle. As a result, many states now require real estate agents to provide written disclosures to both parties so buyers and sellers will know who represents whom.

You may be wondering if it would be possible to cut through the confusion and simply hire your own agent. That is certainly possible. A buyer's agent has a duty to look out for your best interest and will also assist you in determining both the advantages and disadvantages of each property you consider. This is something that even experienced dual agents can rarely handle.

It should be noted that any agent or broker can act as an exclusive buyer's agent in a real estate transaction. You should understand; however, that most buyer's agents do also handle residence listings as well. This means that if you wished to purchase a property listed with that agent then the agent could not act as an exclusive buyer's agent for that sale for you.

Remember that how the sales commission is split won't determine how the agency relationship is represented. This means that while traditionally the seller pays the sales commission to the listing agent in the event there is a buyer's agent in the transaction that agent would also generally receive at least a part of the listing commission.
Typically the commission split would be 50/50, this could change if the listing agent and the home seller are ready to provide an incentive to speed up the sale of the property.

Even so, this doesn't mean both agents work for the seller just because it is the seller paying the full sales commission. In such an instance the listing agent would represent the seller while the buyer's agent would still represent the buyer even if the seller is the one paying the buyer's agent.

Such a situation could also become complex if your buyer's agent shows you a property that is for sale by owner. In this case the seller would commonly agree to pay the buyer's agent a portion of a normal sales commission, which would normally be about 3%. The buyer's agent, however, would still represent you as the home buyer and not the seller in the transaction. Keep in mind that if the seller refuses to pay a commission and you have a written commission agreement with the buyer's agent you may be obligated to pay the agent's fee.

When looking for a quality buyer's agent it is important to ask around for referrals to make sure you find the right one for you. Avoid working with the first buyer's agent you come across. Take the time necessary to find a buyer agent who comes highly recommended and one you feel comfortable working with.

Remember, working with a buyer's agent and avoiding working with agents who act as dual agents, due to the inherent risk of conflict of interest, can help you to avoid complications and obtain the best terms possible with your new home purchase. Click here to find a right buyer's agent in your area for free now!



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