A Buyer's Agent: Why You Need One

Buying a home is usually the largest purchase and financial commitment most people make in a lifetime. The process of finding and buying a home is both exhausting and complicated. For those reasons, you should find an experienced, local REALTOR® like Wayne McCormick, Broker/Owner at Realty Executives of Flagstaff, to guide you through the process, represent only you, and ensure your best interests are protected from start to finish. Here’s why Wayne is your best choice.

Typically, there are two REALTORS® involved in a real estate transaction.

1. The Listing Agent works directly with the seller and represents them.
2. The Buyer’s Agent works with the buyer and represents them.

Both agents are legally bound to represent only the interests of their clients, the buyers and sellers.
Some buyers make the mistake of contacting the listing agent and asking them to show them a home they are interested in. Buyers often think they can “get a better deal” if they work with the seller’s agent.

There are several reasons why that can be a costly mistake.

If you do choose to work with the seller’s agent, your choices of being fully represented are nonexistent. A seller’s agent can help you buy his seller client’s house with these agency choices:

1. Seller Agency – “The licensee has the duty to represent the seller’s best interests in the transaction.” You are not represented.

2. Single Agency – For all practical purposes, the same as a Seller Agency. You are still not represented.

3. Disclosed Dual Agency – A disclosed dual agent is a licensee acting for both the seller and the buyer in the same transaction and with the knowledge and written consent of both parties. The licensee cannot advocate on behalf of one client over the other. You are not fully represented. 

None of these choices allow a licensee to fully represent you, the buyer.

Here Are Some Common Pitfalls When A Home Buyer Works Directly With The Listing Agent.

• If the listing agent is only representing the seller then they cannot by law be representing your best interest at the same time. On the other hand, if you have a buyer’s agent on your side, their loyalty and obligations are only to you and your interests.
• If the listing agent is only representing the seller, they cannot give you advice on how to structure an offer, what to offer, or answer any of the dozens of questions buyers often have during a transaction.
• A bias can be created if one side does not feel fairly or fully represented. That can cause an increase in liability for a licensee who is working with both a seller and a buyer at the same time.

Buyer Representation

When Working With A Buyer’s Agent

After review of the Buyer-Broker information, when both parties come to an agreement, here are some terms and obligations binding both parties under the agreement:

Broker’s Obligation

• To use the broker’s best efforts to locate and submit property meeting the buyer’s criteria,
• To represent the interests of the buyer and assist in all phases of the buying process, and
• To abide by all applicable laws, rules, and regulations, including the National Association of REALTORS® Code of Ethics.

Buyer’s Obligation

• To advise all other parties of the broker’s exclusive representation of the buyer,
• To conduct all purchase negotiations for property in the Market Area through a broker, and
• To make all reasonable efforts to abide by the terms of any executed purchase contract.

Compensation 

For these services, the broker will be paid a fee at closing equal to the amount listed in MLS for the cooperating broker’s payout. For properties not listed with a broker, we will seek compensation from the seller, but the buyer agrees to fund any deficiency up to 3% of the purchase price. This compensation agreement shall apply to all properties that the broker submits for the buyer during the term of this agreement for a period of 120 days beyond the termination date.

Termination 

This agreement terminates at 11:59pm on the last day of the term, unless, before that time, the buyer has entered into a contract to purchase property covered by this agreement or if either party notifies the other in writing that they wish to terminate this agreement within 7 days’ notice. If the buyer is under contract to purchase a property, then this agreement will continue if effect until closing.

Mediation 

If a dispute arises concerning this agreement and con not be resolved through good faith negotiations, then both parties agree to submit the dispute to mediation. If mediation becomes necessary, the parties will choose a mutually acceptable mediator and will share equally in cost.

A Buyer’s Agent’s job is to advise you through every step of the Homebuying Process.

In summary:

• Begin loan approval process,
• Start home search,
• Make an offer,
• Go under contract,
• Schedule inspections, repairs, and insurance, and
• Go to Closing.     

What Are Some Specific Things My Buyer’s Agent Can Do For Me?

Glad you asked, here are just a few from a very long list:

• Assist in finding a local lender and helping you get prequalified for your purchase. Coordinate the loan process to ensure timelines are followed.
  • Discuss various financing options currently available such as FHA, VA, Rural Housing, Jumbo Loans, and others.
  • Identify your wants and needs in a new home.
  • Network with other local agents for homes not yet in the MLS, aka “coming soon”.
  • Help you select for viewing only those homes that fit your wants and needs.
  • Assist you in analyzing the pros and cons of each property.
  • Assist you in evaluating properties for suitability, affordability, and resale value. Bring attention to any shortfall in appraisal value compared to final sales price, so no surprises once the contract is ratified with the seller.
  • Provide you the latest market data such as days on the market, list price to sold price ratios, closed prices, and other current market data.
  • Guide you in preparing a purchase and sales agreement to make an offer on a property, drafting and negotiating contract terms like your personal attorney representative.
  • Help you create a negotiating strategy. Depending on market conditions, perhaps get the seller to buy down the buyer’s interest rate on the loan; or make adjustments on the potential market offer for items like flooring, cabinets, countertops, or any upgrades that have some adjusted value to the final contract offer.
  • Ensure you receive and understand all required state and federal disclosure forms
  • Prepare you for multiple offer situations and develop negotiating strategies relative to multiple offers.
  • Recommend inspectors, lenders, attorneys, and other professionals as necessary and ensure inspections are completed.
  • Be an advocate and advisor during the closing process.
  • Review and discuss home inspection concerns and provide an arsenal of handymen and contractors for more insights into the cost of any repairs on the house.
  • Monitor and communicate required contract deadlines to ensure they are met.
  • Accompany buyer clients on the final walk-through before closing to ensure the property is in the same condition as when contracted and that all contingencies have been met.
  • Remain a life-long trusted advisor for real estate questions, needs, and concerns.
  And lots more.

Some ask; “How Much Does A Buyer’s Agent Cost?” But a better question might be: How Much Does NOT Having A Buyer’s Agent Cost?”

There is a cost to hiring someone to act solely on your behalf. First of all, real estate commissions are fully negotiable between the licensee and their proposed client.
Often the seller’s agent has already agreed to share the fee the seller is paying them with the agent that brings the buyer. In any event, you will know exactly what amount you will be responsible for before you sign anything.

Finally, you should make sure the real estate licensee you hire to be your buyer’s agent is a REALTOR® which means they are members of the National Association of REALTORS® (NAR) and have pledged to abide by their strict Code of Ethics. Not all real estate licensees are REALTORS®.

Contact me with any questions!

Wayne@WayneMcCormick.com

928-526-7300