Working with a Buyers Agent
As a homebuyer, you have the option of hiring a real estate agent to represent you. Called a buyer's agent, this professional works in your best interests throughout the entire transaction. Sound like an advantage you would like to enjoy? If so, you'll want to read the following overview of what you should expect from a buyer's agent and what is involved in hiring one to work for you.
What to Expect
When you work with a buyer's agent, you should expect loyalty and confidentiality. This includes duties and obligations related to disclosure of information to you and protection of information about you. More specifically, an agent serving as your representative should:
Promote and protect your best interests, above all others, in the transaction
Disclose material facts about the property that might influence your purchase decision or price
Share information with you about the seller that could enhance your bargaining position
Guard confidential statements you make that would work in the seller's favor if known
You should also look to a buyer's agent for expert guidance on all aspects related to your home purchase. This means that, in addition to helping you find properties that meet your specifications, the agent should:
Research properties to identify issues that help you make informed decisions
Perform analysis of information to arrive at a reasonable offer price
Assist in writing your purchase offer, including any contingencies
Present your offer to the seller and negotiate to get your price and terms
Explains forms, agreements and other paperwork
Handle the day-to-day details of your transaction
Although many of the activities performed by a buyer's agent are comparable to those any good agent would do for a buyer, the difference lies in the fiduciary relationship -- where loyalty lies. Whereas a buyer's agent is loyal to you as the purchaser in a transaction, an agent who is not working in that capacity has duties and obligations to the seller even if the agent did not list the property for sale. Unlike the buyer's representative, other agents may only be able to share material facts about the property with you. Agents "working for" the seller cannot share any other information about those sellers without their permission. And information that you thought was shared confidentially can be passed along to the seller.
Contracting with a Buyer's Agent
A written buyer agency agreement spells out the terms of your working relationship with a buyer's agent. Once signed, it is a legally binding contract. So make sure you understand every aspect that it covers and that it includes all expectations held by you and the agent. For instance, the agreement should address elements such as the time period being committed to, how the commission will be paid, what geographic area the agreement includes, and whether you can work only with that agent or with multiple agents.
A buyer agency agreement is negotiable. Be comfortable with everything that is included in it. And be comfortable with the agent. Ask people you know and trust for their recommendations. And when you talk with potential agents, ask questions that help you determine their personality, working style, and level of responsiveness. Keep in mind that some agents work exclusively with buyers all the time, while others have buyer and seller clients in different transactions. Whichever agent you choose, consider exercising the option to work with the agent for a short time before you commit to a buyer agency agreement. That way the two of you can see how compatible you are before you are bound by a contract.
Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.