7 Reasons Why You Need a Buyer’s Agent

said on March 14th, 2011 filed under: Information for Buyers

My broker, Donna Evers (of Evers & Company Real Estate, Inc.), has been in the business for quite some time. And while she doesn’t sell property herself anymore, she oversees a hundred agents and hears their stories day in & day out. She penned the attached article for the Washington Business Journal, and has kindly given permission to share it. It’s good, solid advice:

“It may sound hard to believe today, but the concept of buyer’s agency in residential real estate was revolutionary when it came into practice in the 1980′s. The District of Columbia was one of the first jurisdictions in the country to institute buyer’s agency, and Maryland and Virginia quickly followed suit.

The real estate profession needed this change in agency practice because most homebuyers mistakenly believed the agent who was showing them properties was working for them. Instead, all agents were working for the seller- the party who was paying the agents’ sales commissions. So the advent of buyer’s agency meant that buyers now had the option of hiring an agent to represent them.

So far so good. But here is where the problem came in. Previously, in the home sale transaction, the seller paid a commission to the listing brokerage to list and sell the property, and the listing company agreed to share commission with other companies who subscribed to the multiple listing service. With buyer’s agency, the listing agents are commission-sharing with agents representing the buyer. At first, sellers balked and wanted the buyers to pay their agent themselves. But, sellers soon understood that they were paying the same amount as before and they would fare much better on the sale of their homes if the agent bringing the buyer was assured of compensation from the proceeds of the sale.

As for buyers, it’s all good news. Hiring a buyer’s agent generally doesn’t cost you extra, and having a skillful and well-trained agent on your side is invaluable.

Here is some advice that will help you find the right agent and work effectively with that person:

1) Choose the best agent. Do the same things you’d do when interviewing people for any job. Get good applicants by asking friends and co-workers who have recently bought a home, checking out web sites of local companies and reading the agent biographies, and watching for agents’ names associated with the neighborhoods where you are looking. Interview them in person or on the phone. When you find an agent whom you like and who stands out from the others, that’s the person to hire.

2) Communication is key. Choose an agent you can trust and who is on your wave-length. If you change your mind regarding where you want to live or how much you are willing to spend after three weeks of heavy-duty looking, don’t worry; lots of buyers do. The important thing is to tell your agent as soon as you feel a change coming on. Don’t waste your time or theirs.

3) Take the advice you are paying for. If you disagree with the agent, talk it out. Don’t leave any of your concerns “unsaid”. If you need additional data to make a decision, ask for it. If you are afraid, worried or overburdened with angst, let your agent know. They are used to all of this.

4) Objectivity is key. Remember, your agent has one great attribute you don’t have: your agent is not you. They have objectivity that you can’t have, by definition. They are trained to keep you focused and on track. For example, they will remind you of the items you said were not negotiable. If you said you must have a kitchen big enough for both you and your husband to do the cooking, and you find an apartment with a tight galley kitchen but a fabulous view, your agent will intervene with a reality check. If you still decide to go for the view, that’s your business, but at least you will be reminded of what you said you had to have.

5) Anxiety can be overwhelming. With a good agent, you won’t perish from anxiety when you sit down to make an offer. You will find that buying a home can be more nerve-wracking than you ever imagined. A good agent can handle it for you. Just be sure to communicate fully and honestly- now more than ever. This is not the time to have a private agenda or clam up about how much you really want to pay for a property. If you want to pull a poker bluff, don’t pull it on your agent! There is no substitute for the agent’s objectivity and experience at this crucial time.

6) Negotiating is not for novices. Making an offer and dealing with counteroffers, negotiating repair items on a home inspection, and getting all the way to settlement can also be tough on the nervous system. Once again, you need an objective advisor to act on your behalf, keep track of time periods and get you to settlement with everything in order, including your sanity. You need a real “pro” at your side, who understands what’s important to you, but at the same time, can stay objective.

7) Get it in writing. One last thing: you and your agent should sign a buyer’s agency agreement, with the terms of the agent’s obligation spelled out for you, and with a specific time period. Some buyers say they prefer to keep their options open, not commit to any one agent, and “play the field.” All that this means is that no agent is going to have you first on their list. When properties come on the market, agents who are committed by contract to buyers will call them first, as they are obliged to do. When they have a time crush, they will give their time and attention to the people with whom they have a contract.

Sometimes buyers feel they will save money by having the listing agent write their offer, hoping that since the agent will not have to share commission, they will “cut” their commission and the buyer will be able to buy the property for less.

The listing agent may or may not be willing to do this, but whatever the case, remember that the listing agent is always representing the seller, at least partially. In Maryland, the listing agent can only represent the seller; in DC and Virginia, the listing agent can represent both the seller and the buyer, via “dual agency”. This allows them to keep confidences for each party, while trying to get the best deal for both seller and buyer. It’s easy to see how this representation is “watered down”, especially for the buyer. Also, while the buyer has just met the agent, this agent already has a standing relationship with the seller.

Whether you are buying a property for $200,000 or $2,000,000, it’s a lot of money to you. Make sure you get expert, objective advice on how to spend your money. Hire a buyer’s agent.”

( From The Washington Business Journal). Thanks, Donna.

posted by Marcie Sandalow

This entry was posted on Monday, March 14th, 2011 at 8:37 am and is filed under Information for Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

ginny lacey gorman said at March 14th, 2011 at 9:00 pm
Marcie, buyer’s agency is so important and it’s interesting to hear that your area was one of the first to institute it. It protects everyone in the transaction even when things go wrong. Thanks for sharing it.
Nikki Smith said at March 16th, 2011 at 10:19 am
Hi Marcie,

This is a fantastic article. Would you mind if I re-posted it on Federal Title’s blog with a link back to you? Do you have any other articles you’d like to send my way? Hope all is well!