What Experts Say
What the Press Says About Buyer Brokerage
Is Your Agent Really Working for You?
By Christopher Cruise
You wouldn’t – for a lot of good reasons – go into a contested divorce proceeding without an attorney, or worse, take the advice of your spouse’s attorney.
Why, then, would you buy a home – an adversarial process regardless of how friendly everyone involved in the transaction seems – without someone on your side?
Oh, you think home buyers have always had representation? Well, think again.
Recently, more home buyers have been asking, "Who represents whom?" As a result, many are opting to be represented by a buyer’s agent to take them through the process, from house hunting to closing. The greatest thing about this is it doesn’t cost the buyer anything and often saves them thousands.
Hire a Broker
The last thing you want to do is walk into an open house and start blabbing how much you can afford to the agent who has listed the house. That agent owes his or her allegiance to the seller – and only the seller. If you’re negotiating with a pro, you ought to have a pro in your corner, too.
One credential to look for is an Accredited Buyer’s Representative (ABR) designation from the Real Estate Buyers Agent Council, a Realtor Group.
House Hunting? Save by hiring your own Broker
By Carla A. Fried
If you ever doubted the value of real estate agents who work solely for home buyers (as opposed to traditional agents who report to sellers), consider this: A recent study by U. S. Sprint found that 232 relocating Sprint employees who hired buyer’s brokers paid an average of 91% of a home’s list price. People who use traditional agents typically pay about 96%.
Smart Money: A personal shopper for your dream house
By Pam Black
A traditional real estate broker is legally bound to work for the seller who pays the commission and therefore may be more intent on selling listed homes than finding your dream house. Even Realtors who don’t hold the listing on a given house act as subagents to the sellers. So unless a broker says that he or she is working for you – brokers are now legally obliged to disclose who they represent—you can assume the broker is working for the seller. Such agents must pass on information such as the buyer’s income to the seller, who then has a better idea of what price to hold out for.
Because these (Buyer) brokers are obliged to get buyers the best deal possible, they approach a house with a critical eye for apparent flaws. Buyer brokers also show properties sold by the owner. Sellers' agents usually won't show these homes because they don't make commissions on them.
A well-trained, experienced buyer broker is a great asset, says Peter Miller, author of "How to Sell your home in Any Market." Usually the buyer broker splits the sales commission with the seller's agent, just as a subagent who didn't have the listing would the broker who did. So the fee still comes out of the sale price. Some people might assume that buyers' agents have an incentive to keep the price high. But again, the broker must get you the best deal. "In my experience, all of them do." says Stephen Brobeck, executive director of the Consumer Federation of America.
Level the playing field when you buy a home...You may get a better deal with your own broker pulling for you...The introduction of buyer brokers takes a horribly one–sided process and simply makes it fair.
Consumer Federation of America
We urge consumers who are purchasing a home to first consider an exclusive buyer broker relationship.
The New York Times
Buyer brokers make a great deal of sense.
Groups such as the Consumer Federation and the American Association of Retired Persons recommend using buyer's agents...the reason is they work.
The San Francisco Examiner
Exclusive buyer agents make every effort to get the lowest possible price for their buyers.
The best buyer brokers are so-called exclusive agents...they represent only buyers.
The New York Times
About Real Estate: More Agents Represent Home Buyers
By Diana Shaman
Buyer brokers say they can negotiate the best price for their clients. "We act in a sense like an attorney or an accountant to protect the buyer, so that they can make an informed decision and buy the best home for them."
Although there are variations, the buyer broker generally receives the same amount as a seller broker’s subagent who produces a buyer. The amount that the seller receives for the home is the same as would be the case if the home’s purchaser had been found by an agent representing the seller. Representation is something buyers could and should have had all along, said Maureen F. Glasheen, a former general counsel to the New York state Department of State and now a business and legal consultant in Albany.
The Wall Street Journal
Exclusive agencies are the best since they have no conflict of interest, which is the main reason for hiring a buyer broker in the first place.
What does an exclusive buyer broker do?
Help you price. Before making an offer, good agents compare similar homes in the area and estimate how much you should offer for the home you want. The agent can also help you determine how much the home will cost you each month.
Negotiate contracts. Until you and the seller agree to the price and the terms there is no deal. An experienced agent knows how to navigate these treacherous waters. For example, coming in too low at the beginning may turn off the seller so much they may refuse to deal with you altogether.
Work with your attorney/inspector. During the attorney/inspection period, there are a myriad of details that can arise that an agent should deal with promptly. The agent will keep in close contact with your attorney or inspector to make sure the deal is moving expeditiously.
Assist with mortgage applications. The agent can help with finding the right mortgage broker or lending institution and keep in touch with them during the application process.
Attend the closing. This varies from state to state, but agents often come to closings with you.
The Motley Fool
How can a good Fool make sure that the guy who is helping him is really helping him. By hiring a buyer broker instead.