Buyer Brokerage
Isn't the agent who shows me homes
representing me?
Not necessarily. Unless you have a written agency
agreement, the agent showing you homes may not represent you. In
fact, that agent may represent the seller. If the agent
represents the seller, everything you say can be carried back to
the seller, thereby helping the seller make a better and more
informed decision about how to deal with your offer. You may
have given away several strategic negotiating advantages simply
by opening your mouth to an agent that does not represent you.
You can ask your agent to represent your best interests. That
way, anything you say can be held in confidence. The agent would
then have fiduciary duties to you and not the seller. It is a
good idea to decide up-front in which capacity you want your
agent to work with you. Many states, including New Jersey,
require up-front disclosure on this subject.
Bob Latigona does offer Buyer Agency to buyers at no
additional cost. The fee is still being paid by the seller. Many
people believe that whoever is paying the fee is who the loyalty
is owed to. This just simply is not true. Agency has nothing to
do with who pays the fee.
What can a Buyer's Agent do for me?
A buyers agent can do everything traditional agents do plus
the following:
- Locate and show targeted properties, showing both
strengths and weaknesses.
- Perform a market analysis to assist you in determining
"Fair Market Value."
- Advise client regarding offers on property.
- Consult with client regarding counteroffers,
contingencies, and negotiate on client's behalf.
- Assist with favorable financing.
- Strict Confidentiality.
- Many other services too numerous to list.
Call Bob Latigona to see how a Buyer Broker may be able to
save you $$$ on your next transaction.
Agents provide valuable services to buyers. They can find
suitable listings of homes for sale and present your offers to
sellers. They are a fountain of information about local housing
trends, prices, conditions, and so on. As a buyer, you have a
choice to use a buyer agent or not. Either way, you can enjoy
the services of a real estate professional. Here’s how.
Who does the agent really work for?
Unless otherwise arranged, real estate agents work on
behalf of the seller's interests. In other words, the agent
is obligated to get the highest possible price for the
seller. This can be confusing for buyers who are asked to
share many details of their finances and home preferences.
When the time comes to make an offer and negotiate the
purchase, this shared information can work against the
buyer. To better understand this, remember - the agent works
with you, not for you.
Many jurisdictions now require agents to tell buyers that
they must represent the seller's interests. Even if an agent
does not disclose this, be aware that he or she works on
behalf of the seller.
How can I get the agent to work on my behalf?
The only way to legally obligate an agent to represent
you, the buyer, is to enter into a Buyer Agent or Buyer
Agency Agreement. This agreement simply states that the
agent will work on behalf of your interests instead of those
of the seller.
What are the benefits of having a buyer agent?
If you ask an agent to explain the benefits, he or she
will list better service and a greater assurance to find the
right home. In fact, a good agent should do this for you
anyway - whether or not they are your buyer agent.
The main benefit of having a buyer agent is to have a
professional negotiate the best price and terms of sale for
you - not the seller. In theory, this allows you to disclose
the details of your price limit, etc., and benefit from the
agent’s experience and knowledge of negotiating strategies
that favor buyers. Also, because the agent meets with the
seller (you will not be there when your offer is presented)
he or she can advise you on the seller’s negotiating
position.
If you believe that you will get these benefits, you
might be happy with a buyer agent. But if you don’t trust an
agent to act in your best interest under any circumstances,
you might not be satisfied with the agreement.
If I sign a Buyer Agency Agreement, must I use
only that agent?
Yes. Buyer Agency Agreements require you to use that
agent exclusively. This is actually to your benefit. Even if
you do not engage an agent as your buyer agent, it is smart
to stay with him or her. People who bounce from agent to
agent really do themselves a disservice. An agent will work
harder for you when he or she knows that you will not defect
to another. Because you will be spending a lot of time with
your buyer agent, choose carefully. He or she should be
someone with whom you are comfortable and confident. For
more details, check out the article, "How to Find the Right
Real Estate Agent".
If I sign a Buyer Agency Agreement, must I pay my
agent?
This depends on the practices of your area. In most parts
of the United States, buyer agents tend to be paid from the
commission on the sale of the house. Therefore, buyers do
not directly pay their buyer agent. Some agents might
suggest payment but buyers tend to resist.
In some areas of the United States, buyers can pay their
agent just as the seller pays his or her agent. Sometimes
the payment is a commission and sometimes it is a fee for
service. The reasoning behind this is: "He who pays the
piper, calls the tune." In other words, when the buyer pays
his or her agent directly, this ensures that the agent will
work on his or her behalf.
I don’t want to pay an extra fee. What can I do?
If you can’t find an agent who will represent your
interests without direct payment, you can still work with an
agent who is not bound by a Buyer Agency Agreement. That
agent can still find suitable houses, show them to you, and
present your offers. None of these functions will compromise
you. Just remember that the agent will be obligated to
represent the seller's interests. Therefore, don’t share
information or strategies with the agent that you would not
share directly with the seller or the seller’s agent. Also,
have your real estate lawyer prepare and review offers and
contracts; (you should use the lawyer for this anyway). He
or she must act in your best interest.
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