One of the most misunderstood aspects of buying a home is “does the real estate agent REALLY represent you, the home buyer?”
Yes, you do have the right to ask an agent to solely represent you. Here are some FAQs as to what’s involved and why you should consider it when buying your next home, second home or investment property.
1. What does Buyer Representation mean?
The real estate agent represents your interest. They are required to be loyal, accountable and not disclose any information about you that you don’t want the seller or the other real estate agent to know.
2. Should you call the agent who listed the house for sale?
You may, but they are representing the seller—not you—and their responsibility is to get the highest price and the most money for the seller. You will also have to sign a piece of paper stating that you are aware that the real estate agent will be representing both of you, and will do their best to be fair and honest.
3. Will you get a better deal if you work with the listing agent?
Some people think since the real estate agent would be getting all the commission when working with both the buyer and the seller, that the listing agent will negotiate a better deal. The bottom line is that if the seller doesn’t accept the offer, or if you, the buyer, won’t counter with another price, it’s out of the agent’s control and the sale does not happen.
4. Will they only show you listings that are in the MLS?
An agent who represents buyers not only can show you properties listed for sale through the Multiple Listing Service, they can also contact For Sale by Owners. If there is a home you’d like to buy, but it’s not for sale, they can knock on the door for you and ask if they would consider selling it to you. This is not to say that a listing agent can’t do the same. They can, but a homeowner often thinks the agent is just trying to get a listing if there is not a specific buyer interested – you.
5. How much does it cost to hire a sellers agent?
Over 99% of the time, the seller still pays the real estate commission. There are extremely rare times where the seller may not agree to pay the commission, but you will know ahead of time if there are any issues.
6. Do you need to sign anything?
Yes, there is an agreement called the Exclusive Right to Represent the Buyer, and it outlines what the sellers representative’s duties are and their responsibility to you. It lets the seller and the real estate agents know that there is an exclusive relationship existing and if they tell your agent something about the property, or the seller tells your agent, or any other information, your agent has the duty to tell you. You will usually have to sign it for a period of time—but that too is negotiable between you and the agent.
There is yet another reason to have an agreement with a buyers agent. No real estate agent will work as hard for you if you are hopping from one real estate agent to another. Their job is hard enough as it is, but to put so much time and effort into a buyer only to have that buyer wander into an open house and write an offer with whatever agent is sitting there that day (it may not even be the listing agent) is very disheartening. Form a bond with your agent and work closely with them and they will find your home. If you feel they aren’t doing their job, tell them and move on to someone new, but don’t work with several simultaneously. You will be getting duplicate listings and find yourself running in circles. All business is about relationships and real estate is no different. Remember, you can always vote with your feet!
If you are thinking of selling your home, contact me and I’ll recommend several great listing agents. If you are thinking of buying a home, I also know of many great buyers’ agents who I can recommend to you.