The following will dispell some myths about the role of a buyer's agent in a real estate transaction:
A buyer's agent is defined as a "real estate buyer's representative who represents the buyer EXCLUSIVELY in a real estate transaction, not withstanding who pays the commission." Research by the National Association of REALTORS has shown that when a buyer's representative is used, the prospective buyer found a home one week faster and examined three more properties than consumers who did not use a buyer's representative.
The buyer's representative works for, and owes fiduciary responsibilities to, the real estate buyer and has the buyer's best interests in mind throughout the entire real estate process. A buyer's representative will:
â€¢ Evaluate the specific needs and wants of the buyer and locate properties that fit those specifications.
â€¢ Assist the buyer in determining the amount that they can afford (pre-qualify), and show properties in
that price range and locale.
â€¢ Assist in viewing properties -- accompany the buyer on the showings, or preview the properties on
behalf of the buyer to insure that the identified specifications are met.
â€¢ Research the selected properties to identify any problems or issues to help the buyer make an
informed decision prior to making an offer to purchase the property.
â€¢ Advise the buyer on structuring an appropriate offer to purchase the selected property.
â€¢ Present the offer to the seller's agent and the seller on the buyer's behalf.
â€¢ Negotiate on behalf of the buyer to help obtain the identified property -- keeping the buyer's best
interests in mind.
â€¢ Assist in securing appropriate financing for the selected property.
â€¢ Provide a list of potential qualified vendors (e.g. movers, attorneys, carpenters, etc.) if these services
Using a buyer's agent is not a new idea, it's just an idea whose time has come.
Yvonne Baker, Real Estate Consultant
Buyers' agents get nothing if there is no sale, so they want their clients to buy no matter how bad the deal is, the exact opposite of the buyer's best interest. Agents take $100 billion each year in commissions from buyers. Agents claim the seller pays the commission, but always fail to mention that the seller gets that money from the buyer. Think about it: who brings the money to the table - the seller or the buyer? All money comes from buyers. No buyer, no money.
If a stock broker were to charge 6% on the sale of stock, he would quickly go out of business. Real estate brokers don't do much more than stock brokers, so why should you give up nearly two years of your working life earning money to pay a realtor for the few hours they may put into helping you buy or sell a house? 6% of the 30 years it takes to pay off a house is 1.8 years of donating your working time to your realtor.
There are good buyer's agents who really believe they are helping the buyer, but they're in denial about their conflict of interests. Author Upton Sinclair had a great explanation for this: "It is difficult to get a man to understand something when his salary depends on his not understanding it."