When thinking about purchasing a new home, most prospective buyers rely on the expertise of a professional Realtor. They shop around, meet a salesperson they feel comfortable with, and sign up with that individual's agency, confident that she will guide them through the home buying process. What many people don't realize is that, even when your Realtor is from a real estate agency different from the seller's agency, by law both agents represent the seller - unless the prospective buyer has contracted with a buyer broker. So what's the difference? All real estate agents have the legal responsibility to represent the seller ethically while dealing with buyers fairly and honestly. They cannot legally lie or misrepresent the property to the buyer. But as the seller's agent, there's a lot she can't do for the buyer. She can't share information about the seller without his consent. He may be motivated to sell, even at substantially less than the asking price, because he has a job across country and needs to move in two months. A seller's agent can't confide that to the buyer. A buyer broker, however, would be obligated to share that information, if she knew it, to her buyers. A common question buyers ask agents is: What should I offer for this house? Is the asking price fair? A seller's agent is barred from answering that question, or advising the buyers in any way how to write an offer for a piece of property, because that might end up having an adverse effect on the selling price, thus hurting the seller's financial interests. A buyer broker, however, can provide buyers with a detailed market analysis, a document which estimates the property's worth compared to other similar properties recently sold in the same area. The buyer broker can also help craft a purchase and sales agreement and advise buyers about any possible problems with the property. For instance, say that two years down the road a major highway is slated to go through the area within half a mile of the property. This fact doesn't necessarily have to be disclosed by the seller or his agent unless asked, but would certainly affect the buyer's view of the home. One concern people have when hiring a buyer broker is how the sales commission is going to be paid. A lot of prospective buyers hesitate to consider a buyer broker because they are under the impression that they need to come up with the buyer broker's fee out of their own pockets. You need to quiz your broker about this, but most will be happy to show you how they can write a purchase and sales agreement which assures that their commission, and that of the seller's agent, are paid out of the proceeds of the sale - that is, by the seller. Just make sure that if you do come to an agreement about how the commission is to be paid, you get that agreement in writing. There is one major caution in hiring a buyer broker: make sure you are ready to buy before you contract for a broker's services, and make sure the agreement is for a specified period of time. You don't want to waste a broker's time if you're just window shopping. Also keep in mind that if you contract for a buyer broker's services, then find a home on your own or with another broker, if any part of the purchase process takes place within the time limit of your contract with the buyer broker, you legally owe her the full fee, even if she hasn't been involved with the purchase at all. A skilled buyer broker can potentially save you a lot of money on your new home purchase, and can certainly save you aggravation by troubleshooting the property and the location for you before you buy. And the best part is, legally and ethically, they are on your side! |
