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Why Home Buyers Should Have Representation

Home Buyers
Home Buyers
Real Estate

Home buyers today are extremely savvy, in part because of the creation of real estate websites. These websites offer information formerly only found through physically searching the court house records, or going through an agent. This past week I had someone challenge me on why anyone would need an exclusive buyer's agent when they can search the internet for information by themselves, and then call the agent who has the home listed. I will tell you exactly why you should call your own agent for representation, and then you can decide if it makes better sense for you to just contact the listing agent.

First, one of the most important things buyers should know is when they call the agent who has the home listed, this agent is working in the best interest of the seller, or they should be. (For example: If a listing agent tells a buyer "Make an offer of $20k less and we can work it out", this is your first indication the listing agent has ethical issues. And if they will undermine their seller, what will they do to you?)

The job of the listing agent is to market the home, promote the home, give buyers the details of the property, and obtain the best price and terms for the seller. As a buyer, you can look online and find out a lot of information about this property, but why would you not want to have your own agent helping you get the best price and term for your purchase? In my particular case, I do not charge buyers a retainer fee or commission to represent them. I get paid commission through the sellers funds at closing (buyer purchases, seller's equity). The seller agrees to pay a certain percentage of commission to the listing company. This percentage is then divided between the listing company and the buyer agent's company(not always equally). Then the companies pay their agents. So, the commission is either going to one agent (who isn't representing you), or the commission is divided between the listing agent and the agent representing you. (There are some buyer's agents who require the buyer to agree to pay their commission or a retainer fee, so make sure. Sometimes buyer's agents work very hard over a long period of time and the deal falls through with no pay.)

There are many great listing agents who have helped buyers through a purchase with the utmost integrity. I was a listing agent at one time and helped buyers who called me because my name was on the sign in the yard. But, I always explained to the buyer that I represented the seller and therefore could not help them negotiate the deal, or give them any information that may give them an advantage in negotiating. If the buyer wanted to get representation, they had every right to do so. Most times, the buyer would agree and continue allowing me to write the offer. There's nothing wrong with that, but again, if this is done ethically, the listing agent is NOT representing YOU. So, why not have your own representation?

Secondly, searching online and finding out information on your own is great, but there are things an agent can tell you through the experience of other real estate transactions that can greatly benefit you in addition to what you research. I will be the first to tell you that I do not know everything there is to know, but I can also tell you that each real estate transaction I have had has been a learning experience. Sharing all of the things that have gone right, and all of the things that have gone wrong in some of these transactions allows me to make your purchase the wiser. Also, if you are purchasing a home in a new area, you need a buyer's agent to help you with area information and also other things that may be particular to that area in the way of inspections, etc. that you may be unfamiliar with.

Thirdly, another important aspect of purchasing a home is the contract itself. Without getting into examples, I will just emphasize the importance having an agent who is looking out for your best interest in writing the offer. You certainly don't want to be liable for purchasing a home when the conditions you agreed upon weren't met, but because the language in the offer did not protect you, you either purchase the home, or potentially get sued. An agent will also keep you informed on timelines that must be met during your contractual process. If a buyer does not meet their deadlines on inspections, for example, the buyer will be in breach of contract and could lose their earnest money.

The process of choosing the agent who will represent you is also very important. Sit down with the agent and ask questions. I always sit down and consult with potential clients to get a sense of what their needs are, and if our personalities are a good fit. Not every agent is a good fit for everyone. You need to feel comfortable with your agent and get a good sense that you can have a successful working relationship.

As an exclusive buyer's agent, I feel my most important job is to educate my buyers about all aspects of the process. My job is not to tell you what to do, or make choices for you. It is to educate you so you can, hopefully, make wise informed decisions and be proactive in your home purchase.

Just remember that real estate websites are fantastic tools for buyers (and sellers), but there are still basic practices that only make sense. Do your research, but also choose your own representation in order to ensure you have all the basis covered for your home purchase.

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