Buying A House? Find A Buyers Agent.
Everybody knows what a Real Estate Agent does. But what exactly is a Buyers Agent, and should you have one? If you are buying a house, you probably should.
If youre an average American, the purchase of a home dwarfs almost every other financial transaction you will ever engage in. You might pay $2500 for a family vacation to Florida or $27,000 for a new car, but at $221,800, the median home price is almost ten times that amount. Not only is it the biggest deal youll ever make, but the odds are, youll only engage in a transaction of this size two or three times in your life. Thats not a lot of room for practice, and even the simplest mistake can make a huge impact on what you may end up spending.
Real Estate Agents are involved in the process of transacting on homes EVERY SINGLE DAY. They know the tricks of the trade and understand how to spot an opening and gain a competitive advantage. If the agent is representing you, thats great. But, if they are working for the other party, you might just find yourself holding the short end of the stick. This is not to say that most Real Estate Agents are unethical; the vast majority are as honest as the day is long. Its simply a fact that they act, as they should, in the best interest of their clients. Its how business gets done, and its why experience is so importantnot just in Real Estate, but in life.
Now, heres the part most people dont understand; unless you have a specific agreement in writing, the law recognizes that the real estate agent is working on behalf of the seller, not the buyer. Thats rightif you havent signed a Buyers Agent agreement, then that agent is working for the seller, not you. The seller pays his agent a commission and sellers agent then pays YOUR agent as a subcontractor.
Until the 1990s, this was always the way it worked. However, since that time, the laws of most states have allowed for a Buyers Agentand that person works for you, the home buyer.
Like the agent representing the seller, the Buyers Agent is also in the industry. Like the sellers agent, they know the tricks of the trade. But in this case, they are working for you and your best interests, not those of the seller. If your Buyers Agent finds out that the seller needs to unload their house by tomorrow at any price, they are legally obligated to let you know, and ethically obligated to carry on negotiations in your best interest. On the other hand, because they work for you, the Buyers Agent is NOT obligated to tell the seller that you can actually afford to make a higher offer than youve made. In short, the Buyers Agent is in your corner.
And, in most cases, you, as the buyer, dont have to pay your Buyers Agenthe still gets paid by the broker who is listing the propertybut in this case, they are legally bound to work in your best interests.
In general, hiring a Buyers Agent is a fairly simple process. Do your homework. Ask questions about the person you are thinking of working with. Talk to other clients if possible. Ensure that they are in good standing with the appropriate regulating bodies. Once youve found a Buyers Agent who is a good fit, you will likely be asked to sign an agreement which states that you will work exclusively with them for a given period, sometimes as short as a week, sometimes as long as six months. It is also handy to see if they have an exit clause available to youjust in case you need to make a change.
When buying a home, strongly consider employing a Buyers Agent. You wouldnt perform surgery on yourself, you wouldnt represent yourself in court, so why would you make the single largest business deal of your life without a professional in your corner?
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