Why Home Buyers Should Work With a Buyer’s Agent
Let’s face it, buying a home can be exciting and scary. It will be one of the largest investments you will make in your lifetime. This is why it is so important to have a licensed Real Estate Professional representing you. As a buyer you will want someone that is working on your behalf and not only the sellers.
Your Buyer’s Agent is Your Trusted Advocate
Buyer’s agents work for the buyer and have fiduciary responsibilities to the buyer. A buyer’s agent will negotiate the best price and terms for you. Why go through the seller’s agent aka listing agent to negotiate your best interest? Especially, when their fiduciary responsibility is to the seller.
Hiring a Buyer’s Agent Does Not Cost the Buyer
Most buyers believe that they have to pay a sales commission if they hire a buyer’s agent as opposed to going directly through the seller’s agent aka listing agent. This is not true. The seller is the only person that pays a commission, unless otherwise negotiated by all parties. Whether a buyer hires a buyer’s agent or not, the seller still pays the full commission that was negotiated when they listed their home for sale.
Let me give you a scenario.
Let’s say a buyer decides not to be represented by a buyer’s agent. The buyer meets with the listing agent, makes an offer on a property that he/she has listed for sale and the offer is accepted. Hypothetically speaking, let’s say the total commission is 7%. In this case, the listing agent receives the full 7% sales commission.
Now let’s assume the buyer hires their own Agent to represent them. They write up an offer on the same home and it is accepted. Assuming the selling agent and buyer’s agent commission are equally split, the listing agent will receive 3.5% sales commission and the buyer’s agent will receive 3.5% sales commission. In both instances, the seller still pays the full 7% sales commission.
Fiduciary Responsibilities of a Buyer’s Agent include but not limited to:
- Negotiating the best possible price and terms for the buyer
- Protect buyer’s financial information
- Exercise reasonable care and skill
- Loyalty to the interest of their buyer
- Comply with the state and federal laws, rules, & regulations
- Show all properties that their buyers are interested in that fits their criteria and budget
- Inform their buyer if they are currently working with other buyers that are interested in the same property
- Referral of the client to other licensed professionals for expert advice related to material matters that are not within the expertise of the licensed agent. For example, connecting with inspections, service providers, lenders and home warranty
Buyers also have responsibilities to their buyer’s agent:
- Buyers are to work exclusively with their buyer’s agent
- Buyers should never give personal information to any other agent
- Buyers should not call other agents to see properties, even if they think they are saving their agent some time and effort
- Buyers should clearly define their criteria to their agent
Just as sellers interview agents, so should buyers. It is important to find an agent that is knowledgeable of the type of property you are searching for.
Dual Licensed in California and Michigan
Canaday Group RE/MAX Fine Homes
Traverse City, Michigan