BUYERS AGENT : YOU SHOULD USE... ITS FREE!

Many first time home buyers stay away from buyer’s agents because they think it will cost them money. Well, the opposite is really true; a buyer’s agent will likely save you money. How, you ask? Well, most often the buyer doesn’t pay the agent, and the buyer gets the benefits of an agent’s knowledge, expertise, and negotiating skills. See our post about the benefits of a buyers agent for more info on how they can help.

So, how does the buyer’s agent get paid? With the typical sale, a seller pays an agent to list the property for sale. Within the listing contract this listing broker says they will offer a specified percentage of their commission to a buyer’s agent, if there is one. So, the seller is paying a commission to the listing broker, and the listing broker is paying a commission to the buyer’s agent. This is the way most deals work.  

Where the buyer needs to be careful is with FSBO’s (For Sale by Owner) and lower commission MLS deals. It’s becoming more and more common that FSBO sellers are willing to pay a buyer’s agent, but it needs to be written into the purchase contract. Also, many buyer agencies contracts will say that the buyer’s agent gets paid a percentage of the purchase price or the MLS offer of compensation (what the listing agent is offering), “whichever is greater”. When you sign a buyer’s agency agreement, make your agent cross out the “whichever is greater” portion. If you sign an agreement to pay the greatest of 3% or the MLS offer of compensation and the listing agent is only offering 2.5%, you as a buyer could be on the hook for the extra 0.5%. These instances are rare, but you need to be aware of them. We’ve actually never had a buyer pay us any portion of our commission out of their pocket.

As a buyer, having an agent work for you through a transaction rather than for the seller, at no cost to you, is a no brainer.

A couple weeks ago, I wrote about the home buying process and picking a Real Estate Agent. Although, I never really explained why you should have a buyer’s agent. There are tons of benefits to using a buyers agent! They will:

1. Talk through your financials and recommend a mortgage lender who will work well for your needs.
2. Analyze your wants and needs to help determine your requirements for a home and location.
3. Guide you to homes that fit your criteria. Ask your agent to set up a search that will notify you every time there is a new listing or price change meeting your criteria.
4. Educate you about the current market and help you make a wise decision on which home to choose.
5. Look at comparable sales to determine a reasonable purchase price on the home you choose.
6. Walk you through an offer contract and help you determine all the terms required in the contract to meet your needs.
7.  Negotiate on your behalf. Real estate professionals are trained negotiators and can often  get a better price then a consumer can on their own.
8. Keep you on track to meet all the dates and requirements outlined in your contract.
9. Recommend inspectors and testers who will provide you knowledgeable input on the condition of your future home.
10. Coordinate with the lender, inspector, title company, and listing agent to get everything ready for closing.
11. Solve any problems that may arise related to the contract, financing, inspection, title, etc.
12. Get the deal closed so you can start moving into your new home!

….and best of all…

In most cases you don’t have to pay a penny for the buyer’s agent, they’ll split the commission paid by the seller with the listing agent.

Don’t believe the lie that you get a better deal without a buyer agent.




Written : keithandkinsey.wordpress.com