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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