Buying a home is a lot more complicated than purchasing a car. It's a publicly-recorded legal transaction requiring the cooperation of buyers, sellers, title services, escrow agents, lawyers, lenders, inspectors, appraisers and sometimes builders and surveyors. Someone has to coordinate and manage this network of professionals to make the deal go through smoothly. Some agents represent sellers, helping them market their properties, while others represent buyers, helping them choose a home and negotiate a purchase price. Some try to do both (this is called dual agency), but most experts will tell you that it's really not possible to do this and should be avoided. In 25 states, dual agency isn't even legal.
If you just show up at an open house and tell the agent there that you want to make an offer, guess what? That person is NOT your agent. Having him or her write up your offer is like trying to play poker while showing everyone your hand. You need your own representation.
Buyer's Agent Responsibilities
Your buyer's agent should take care of the following:
- Previewing property to make sure it meets your requirements before you take time to view it. This is becoming less crucial in the era of virtual home tours, but remember – virtual tours are designed to showcase only the positives of a house. An experienced agent with two good eyes is more reliable.
- Working with you to determine your needs, wants and deal-killers. No property is perfect, but some are less perfect than others.
- Educating you about current market conditions – a good agent can tell you where prices are going in your chosen area, and at what rate. There may be other neighborhoods with similar characteristics that are better investments.
- Helping you negotiate the price and terms of your purchase and preparing the correct legal forms.
- Handling the deposit of earnest money, opening escrow (the choice of escrow agent, title insurer and inspectors should always be made by the buyer, not the seller).
- Providing oversight and follow up for any required inspections.
- Helping you deal with the unexpected – what if repairs are needed? What if the condo association is embroiled in a lawsuit? What if the seller tries to back out?
- Being present at closing to ensure that your interests are protected.
Notice that strolling through the house with you and saying, "This is the living room" isn't one of those duties.
Finding a Good Buyer's AgentYour best bet is looking for an ABR, or Accredited Buyer Representative, who is specifically qualified to represent buyers. The ABR requires a 12 hour course, active membership in the Real Estate Buyer's Agent Council (REBAC), and at least five documented transactions during the previous 18th month period in which the salesperson acted as a buyer's representative.
It's also preferable that your agent not work with the seller's agent. Many listing agents also work in "teams" that include buyer's agents, all under the same broker. However, the fact that your buyer's agent and the seller's listing agent are on the same "team" might give you pause. Pure buyer's agencies, while not common, are less tricky. Real estate expert Steve McLinden lists the advantages of using an exclusive buyer's agent:
· A good one will make sure your position is not compromised by any behind-the-scenes maneuvering or buddy-buddy agent collusion. The agent won't quietly steer you to in-house or company listings of a specific agency or compromise your bargaining leverage.
· A good buyer's agent will do his or her best to determine the seller's motivation in order for you to strategically tailor your offer.
· The buyer's agent will also provide you with the true days on the market for any for-sale house in your area. (Some homes that have sat on the market for six months or so are often reintroduced as new listings, so you'll want the "cumulative days on the market" number.)
· A buyer's agent will make sure you use a qualified, objective home inspector that will treat you like a client.
· If you are buying a new-construction home, a good buyer's agent can best advise you on things such as cancellation rights, those too-good-to-be-true promotions, and help you aggressively negotiate builder "throw-ins" and credits.
With the right help, buying a home isn't hard. Just remember that the agent makes money only if you buy property, and the higher the sales price, the higher the commission -- so purchase with your eyes open.