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moving again, Other/Just Looking in 43302

Advantage using exclusive buyers agent?

Asked by moving again, 43302 Wed Aug 22, 2007

I have been reading about exclusive buyers agents. I have read all of the advantages, posted by them, are there disadvantages? Nothing is perfect...right? We are ready to move forward. Our house is in contract (believe it or not in this market!) but I am still trying to decide, how to decided ,who to contact at my new locale.

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There is always a possibility that a BA could become complacent if they think you are exclusively theirs and not subject to a competitive threat. That would be rare, and the BA agreement that you enter should provide a cancellation clause. The benefits far supercede the unlikeliness of this happening. The other potential drawbacks are a seller who will not compensate your agent because of an exclusive listing agreement or a FSBO who will not. That could require you to pay the agent directly in lieu of having it be incorporated in the transaction. Most FSBO’s do cooperate and exclusive listings are rare. Sellers want to sell and that means finding the buyer regardless of where they may be.

Most BA take their mission to heart, particularly once a BA agreement is signed, or you have an imposing deadline. When I have a buyer on a mission and know they are counting on me to help them, I will leave no stone unturned. That means checking FSBOs, expireds, withdrawns and networking with agents and sphere. I cannot dedicate this level of commitment to a buyer without a BA agreement.

When choosing a BA, discuss with him/her your expectations and hear their commitment and plan to meet those commitments. I believe that buyers should interview and choose a BA as carefully as a seller interview and chooses a listing agent.
5 votes Thank Flag Link Wed Aug 22, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Moving,
Hi there! I've noticed you've been bouncing around Trulia for a few days--how do you like it? Useful? Since you've been following the threads I won't attempt to explain buyer agency to you. But by now, you should know the best place to find a good REALTOR is through personal referrals. Don't you have at least a few friends/family/colleagues in your new location? If not, I'd recommend a REALTOR with the ABR (Accredited Buyers Representative) designation. Interview a few, then go with you intincts. You can search for one below with the hyperlink in the "Web Reference" line. As for the downside: When you sign an Exclusive Buyers Agency Agreement in Florida, you promise to make sure the REALTOR gets paid when you purchase a home. The only major problem arises if you decide to purchase a FSBO and the owner refuses to pay your buyers agent a commission. Again, this is rare. Even most FSBOs will cooperate with an agent who brings a buyer. There is also a minor issue if the home you decide to purchase is the agent's own listing, or a listed by her company. In that case, you buyers agent must, by Florida law, transition to a "transaction broker". In this case all your personal confidential information remains so, BUT the agent also has some fiduciary responsibility to the seller. The biggest effect of this transition is that your REALTOR cannot disclose to EITHER party the top or bottom dollar figure the other is willing (or unwilling to pay) or the motivations behind the sale or purchase. Bottom line is that your REALTOR cannot tell you anything which may hurt the sellers position, but at the same time, cannot tell the seller anything which may hurt your position. Honesty in all matters, accurate accounting of funds, material defects and disclosures, etc. all remain the same. This may sound confusing, and it is, but a professional REALTOR does this frequently. When this happens within my own office, I usually communicate with other agent regarding the transaction strictly on paper to avoid even the appearance of impropriety. I hope I haven't discouraged you; but you specifically asked about disadvantages, and there they are. A buyers agent is still your absolute best form of representation. I hope that helps! If you need further clarification, just ask! Congrats on the speedy sale of your home, and happy hunting!
5 votes Thank Flag Link Wed Aug 22, 2007
I agree with Deborah, you should make sure there is an out clause should you become unhappy with the service provided you by a buyers agent. But I would really consider using one. When you work with the same person, they will get to know your likes and dislikes. Chances are they will see the perfect house come on the market, call and say, "this is the one", and you will no doubt agree! If you just call an agent off of the sign, or move around, you may find yourself wasting time doing the same moves over and over with each new agent. Just a thought! If you are moving with your company, they may have some contacts that you can get a referral from.
Web Reference: http://carriecrowell.com
4 votes Thank Flag Link Wed Aug 22, 2007
Great question. There are so many advantages to using a good Buyer's agent that they truly do out weigh anything that could be perceived as a negative.

The only disadvantage that I can think of in using a Buyer's agent is if you are wanting to go the home buying process alone. You are agreeing to work with a Buyer's agent to help you through the entire process...from finding a home to contract and then to close. If you are of the mindset and tenacity to learn all of the ins and outs of the home buying process...than a Buyer's agent may not be for you.

Home sellers choose representation when they list their homes. It really makes sense to utilize a professional that is truly looking after your best interests.

Some hints in selecting an agent where you are moving...
1.) If you know of a greal realtor resource where you currently live..ask them if they have personal referrals that can do a great job for you.
2.) Interview the person you are going to use. Most good Buyer agents will have an initial consultation with you to find out what you really want and need.
3) Ask for references of past clients and don't be affraid to call them.
4) Ask about the processes and systems the agent has in place to ensure you have a smooth transaction.

The real estate process can be daunting. A great agent can really make your experience a postive one.
I hope this helps and best of luck!.
3 votes Thank Flag Link Wed Aug 22, 2007
Hey Brandon, no all Realtors are created equal, be careful signing up, once you get into that contract they can make your life a living misserable if you decide to terminate them, they think that just giving you some couples of emails or at best hours of work from them you owed them thousands of dollars.

In todays market they should be competing for your business, not the other way arround.

Everybody is entitled to a pay check for their honest work, but nobody is forced to sign up or pay some one who has not earn their cut.
2 votes Thank Flag Link Thu Sep 27, 2007
One thing I will add is that most good buyers agents will give you a taste of what they are about, meaning they will work with you for a couple of days before making you commit to them.
To add to the points made below, most agents will not dedicate their time to you because they have no commitment, which means a paycheck is not guaranteed. By committing to them, they will commit to you and give you 100% of their effort.
I work with very few buyers (mostly a listing agent) - and it's a real pleasure to work a transaction with a buyer’s agent that is organized and knows what they are doing - remember they will represent your best interest at all times.
2 votes Thank Flag Link Sun Aug 26, 2007
The others have mentioned the advantages of using a buyers agent. I can present to you a real disadvantage: price & negotiating power.

I'm a sales consultant for a Florida builder that does not co-broke with buyers agents... meaning we do not pay them a commission for bringing us customers. That allows us to reduce our home price by 3 to 5% because that is what the middleman (Realtor) gets.

If you are looking at new home construction, you can realistically negotiate 3 to 5% off the price of the home cutting out the Realtor. Especially during this buyers market. If you're looking at used homes, then it may make more sense to use a buyers agent because the seller is going to be paying that half of the commission to somebody anyway.

I've heard of several buyers agents kicking back part of their commission to the buyer. I don't know how legal/ethical that is, but it does happen.
~~~~~~~~~~~~~~

If you are an agent, YOU are a middleman, too. There are people working to cut YOU out also.
As for offering 0 to a buyer's agent, the only people who do that do NOT understand buyer's agency. We only just had buyer's agency introduced to the Long Island area, and there are still a few dinorsaur brokers who refuse to allow their agents to act as buyer's agents (I just left one for that reason), and offer 0% cobroke to a buyer's agent. In this market you ought to be THRILLED to have a buyer. Where they came from is irrelevant.
2 votes Thank Flag Link Sat Aug 25, 2007
First, as far as you having your home under contract, congratulations. You say "believe it or not in this market," but you deserve credit for that as there are still a lot of homes selling in this market, but there are just too many homes compared to the numbers of buyers. Your home going under contract shows that you have a home where the condition and price of the home is a good value compared to the others on the market.

Now regarding the Exclusive Buyers Agent you will probably hear as many opinions as there are Realtors. You will see companies or agents that will not do listings. They may get certified as an Exclusive Buyers Agent or Agency. The thinking is that if they only represent buyers and never sellers, they can represent the buyer better. Does this really make this form of representing buyers better?

Personally, I believe the determining factor should be the agent or Realtor as an individual. Whether exlcusive buyer agency or not there are great agents, good agents, and not so good agents, the secret is finding the right fit for you. I do believe that listing homes is a useful background to actually selling homes, and I believe without listing homes it is hard to learn the view of the sellers and where they are willing to make concessions or what they really want. For example, by working with sellers a few years ago very few would offer seller financing, now I have several that are willing to do so. The way I learned this is by representing sellers. Now when I represent buyers, I will often under certain circumstances try to get seller financing. Would the agent that only represents buyers know this?

With all this said, I do not believe that buyers should ever buy a home directly from the listing agent. The listing agents job is to sell this particular home. Are they going to tell you that there is a home with the same floor plan, in better condition and with a lower price a couple of streets over? Who do they truly represent? Will they fight to get you the best price and terms?

I also do not recommend that buyers purchase a new construction home directly from the salesperson in a new subdivisions model home. After all the salespersons job is to make their employer (the builder) the most money. An example why this is so will help. A builder may give their salesperson $50,000 to negotiate with for a $400,000 home. A buyer comes into the model home center and the salesperson shows the home and the buyer likes it. They ask the price and the salesperson says the price is $400,000. One buyer may say, I will take it, another may say can you do better and they may offer $3,000 or $5,000 off the price or toward upgrades or toward closing costs. They may then take it or try to negotiate it down further. Rarely, if ever will they ever get the $50,000 off the price. Even though the salesperson has room to negotiate, if they just took the $50,000 off for every buyer that walks in, the salesperson would likely be out of a job quickly. After all the salespersons job is to make the builder the most money. And the buyer is likely only to buy one home. Now another buyer comes in with a Realtor. If the Realtor is good they will have researched the subdivision and know that the salesperson has $50,000 to negotiate with. They also have talked to their buyer to find out what is important to them, such as lower price, all closing costs paid, 100% financing etc. They then work to get all of the $50,000 to the buyer. Why would the builder be willing to do this? Because this Realtor or their office, will likely be selling many of this builders homes over the year. The builder then is willing to take less profit since they will likely sell many homes through the Realtors. We bring buyers to builders that give our buyers the best deal.

Now there is one thing that I think buyers should think about signing and that is an Exclusive Buyer Brokerage Agreement. The reason is that you likely want your Realtor to find you the best home at the best price. You want the Realtor to have some loyalty to you. A Realtor can do their job best if you are loyal to them. The Exclusive Buyer Brokerage Agreement builds this two-way loyalty, as it basically says that if you buy a home in the area, you will buy it through this Realtor. If you do sign an agreement make sure there is an easy exit agreement where if you do not like the Realtor, or they do not do their job, you can cancel at no cost. This agreement makes for a much more open Realtor and buyer working relationship. The following example will show why.

Buyer A will not sign a Exclusive Buyer Brokerage Agreement, while Buyer B does. Both Buyers are looking at the same style and price of homes. The Realtor knows the statistic that there is a 1 in 10 chance that buyer A will buy a home from this Realtor. Statistics also say that there is a 6 in 10 chance of selling a home to Buyer B. Why? Buyer A is free to buy from anyone whereas Buyer B will buy from this Realtor
2 votes Thank Flag Link Sat Aug 25, 2007
Like you said, nothing is perfect. However, if you can find a buyers agent that you trust and truly is listens to your wants and needs it is priceless. It is like any other relationship--you both need to have open communication and trust. The realtor needs to know that you are devoted to them also. Once you have established this then your realtor can and will focus on your specific needs and finding your "perfect" home. Talk to your realtor--tell him/her if you want to focus on a different area, price, or style of home...It will be worth it to have someone who knows your style and exactly what you are looking for. I guess the only down side is if you don't feel your realtor is working in your best interest or not listening to your needs. If this is the case it's best to find a realtor who will work for you and your best interest. You'll be glad you did.
Web Reference: http://www.amywengerd.com
2 votes Thank Flag Link Wed Aug 22, 2007
Aren't we forgetting something?
first thing first, if you've an Agent selling your Home, why not asking him to represent you.
You trusted him/her in selling your house much more likely he's the one knowing you better.
2nd a REALTOR can represent both buyer and seller thanks to the consent to transition into a transaction broker; but then again who will he represent?
Mostly important, we REALTOR are professional and detoved people who sweared to certain code of ETHIC; also let's not forget we don't get paid a penny and invest thousands of dollar in every direction, I'm a relationship person, not greedy why should I committ to Clients who doesn't commit to me!
I've been working with 15 buyers, drove them around, worked nights and weekends....to finish empty handed.
Just today, I've sent some properties from MLS to this new client, she went herself and placed an offer with the seller agent!
aren't we forgetting something?! YES we're all 21 yrs, ask your questions, get the answers, look your Agent in the eyes, then commit; like every adulthood should.
A committment is not a marriage and if the agent is in default, there're way out!
Web Reference: http://www.HotHomeSpot.com
1 vote Thank Flag Link Mon Oct 1, 2007
Exclusive Buyer Agency is fine - but if your state offers Non-Exclusive Buyer Agreements, I believe that is better. It still gives you a chance to get to know your agent (and vice versa). And she will be representing you and not the seller. It also gives you the out you may need if she all of a sudden becomes unavailable on nights and weekends. The Non-Exclusive says that you will allow the Broker to be paid if she shows you the house, but if someone else shows you the house - you pay them. Both Exclusive and Non-Exclusive Agency Realtionships are better than dealing with the Listing Agent directly (unless it is new construction.)

If you have an Excusive Relationship, you are locked in to paying that agent the commission, no matter what house you buy (For Sale By Owner) or who shows it to you.
Web Reference: http://www.cityservice.com
1 vote Thank Flag Link Wed Aug 22, 2007
The others have mentioned the advantages of using a buyers agent. I can present to you a real disadvantage: price & negotiating power.

I'm a sales consultant for a Florida builder that does not co-broke with buyers agents... meaning we do not pay them a commission for bringing us customers. That allows us to reduce our home price by 3 to 5% because that is what the middleman (Realtor) gets.

If you are looking at new home construction, you can realistically negotiate 3 to 5% off the price of the home cutting out the Realtor. Especially during this buyers market. If you're looking at used homes, then it may make more sense to use a buyers agent because the seller is going to be paying that half of the commission to somebody anyway.

I've heard of several buyers agents kicking back part of their commission to the buyer. I don't know how legal/ethical that is, but it does happen.
1 vote Thank Flag Link Wed Aug 22, 2007
Good point Steve...

I think commission is how most all R/E works. Listing Agent as well as the Buyers Agent are paid normally by the Seller. I just don't want the Sellers agent or brokerage representing me. To much of a conflict there for me.
0 votes Thank Flag Link Sun Aug 9, 2009
Yeah, and some agents just give you a link to go search for yourself. The problem is that It seams I always end up finding properties that they have the listing on. Makes me wonder... if the agency has a contract with the seller, do I want them to represent me?
0 votes Thank Flag Link Sun Aug 9, 2009
Yeah, good agents can be hard to find. Interesting article today in ActiveRain about the problem with "Dual Agency" and "Transaction Brokers". I find it ironic that in Florida as of 2008 an agent doesn't even have to tell you who he/she is representing. It's as if they all have something to hide.
0 votes Thank Flag Link Sun Aug 9, 2009
Your best move, as the others have said, is to interview agents and find one that comes highly recommended who will not pressure you to buy right away. If you need a recommendation for an agent in your new town, please let me know and I'd be happy to refer you to someone.
0 votes Thank Flag Link Sat Nov 22, 2008
Yeah, the disadvantage is if you get a lazy agent who will only show you 5 homes and pressure you into buying one of them. You never know these things. There are people who are great at selling themselves and that's about all they can sell you. You may end up doing the house hunting yourself and if you signed an agreement with the agent, you owe him a commission.

If you haven't bought yet, price have gone down some more. Here's a good place to start shopping for a house:
http://idx.diversesolutions.com/search/460/
Web Reference: http://www.tampa4u.com
0 votes Thank Flag Link Sat Nov 22, 2008
Good evening,

When considering whether or not to use a real estate professional, I always explain this to my buyers using a "see-saw" analogy. When you go in search of new home, more than likely, the seller is going to be represented by a real estate agent. The real estate agent has a fiduciary duty to their client to sell their home for the most amount of money, in the least time, with the fewest hassles to the seller, and has their client's best interests in mind. In the "see saw" analogy, this places the seller on top, with all the advantage and the upper-hand, and it leaves you at the bottom with no representation.

When you use a buyers agent, you even out the "see saw", and level the field. You have a true real estate professional that can assist you in many facets, from start to finish, in the home buying process. And, like most people that probably will only buy or sell a few homes in their lifetime, it sure is handy to have someone that does it everyday on their side to guide them through every step in the process, and available to answer confusing questions that are certain to arise.

Not to mention, with the price of gasoline at record highs, why not let a professional help you target ONLY the homes that are right for you, and help save you considerable time and money?

For more information, please do not hesitate to contact me directly! I focus on buyers, and would be more than happy to answer any additional questions you may have!

Brian C. Russell
"Uncompromising Excellence in Service"
Keller Wiliams South Tampa
http://Www.TampaHomeWiz.com
(813) 875-3700 ext 288
Web Reference: http://www.TampaHomeWiz.com
0 votes Thank Flag Link Wed Aug 13, 2008
Florida law establishes three types of agency representation in real estate transactions: Single Agency, Transaction Brokerage and No Brokerage Relationship. The law also presumes that the assumed relationship between and buyer and an agent (or a seller and an agent) is as a Transaction Broker unless they agree to a Single Agency or a No Brokerage Relationship. A Buyer's Agent, would be considered a Single Agency Representation.
As a Transaction Broker, a realtor is required to facilitate a real estate transaction in very much the same way as a Single Agent and in most cases you will be well represented by a real estate professional acting in this capacity. However, there is an exception and this occurs in the situation when the same agent represents both the buyer and seller in a real estate transaction which is very possible when a buyer passing a listing calls the realtor whose name is on the for sale sign in the front yard. In this case, the law stipulates that a real estate agent cannot represent one party, either buyer or seller, to the detriment of the other and it is this issue that primarily differentiates the two representations.

Another contrast between the two representations of Transaction Broker and Single Agency is that the Single Agency representation creates fiduciary relationship and therefore the law establishes that the "principal," or in this case the buyer, is responsible for the acts of the realtor acting in a Single Agency relationship. This may potentially create and issue of liability for a buyer. With the Transaction Broker representation the buyer would not be responsible for the agent's actions.

Lastly, many times the agreements you will be asked to sign with an exclusive buyer's agent will stipulate that the buyer is responsible for payment of their fees, which may be 3% of the purchase price of the home you purchase. Language can be added to the agreement making the agent's compensation the burden of the seller but you must be careful because if the agreement stipulates that the agent's fee is 3% of the purchase price and you select a home paying a commission of 2.5%, will the buyer's agent look to you to make up the .5% difference in the commission? I know some that may! Secondly, if you should later decide to part ways with the buyer's agent, you must make sure to cancel the agreement otherwise you may be liable should you use another realtor to purchase a home later on, or that realtor could be liable.

I hope this helps you determine which way to proceed!
0 votes Thank Flag Link Thu Oct 25, 2007
You should find a agent who you trust. Interview a couple agents. Including myself lol.
You need someone who will meet your needs and work for you. Its definatly a buyers market and perfect time to buy. Don't believe the media so much. The Tampa bay area in my opinion has bottom out. I dont think prices will drop too much more.

Disadvantages about a buyers agent. Yes there are some real-estate professional that are all about a paycheck. My best advice is talking to maybe 2-3 agents and go with your gut instinct on who will be there for you all the way. Good luck!


Raquel Zapata-Gonzalez
Licensed Real Estate Consultant
Cell: 813-294-7264
Fax: 813-655-1878
E-mail: rzapata@tampabay.rr.com
http://www.MajesticHomeRealty.com
0 votes Thank Flag Link Thu Oct 18, 2007
Antonio again......
sorry i paasted the wrong reference link, check below.
0 votes Thank Flag Link Mon Oct 1, 2007
Interview the agent , get 3 references & quantify the results they achieved for their most recent clients ( ie. relevant to the current market) .

Sign an agreement, if you must, for 2 weeks & decide on an extension if you decide that tis relationship works for your best interests.

Having said that, if you're lucky enough to find an honest real estate agent, who knows the market, price points, inventory, area, community & homes & financing options .......that you are searching in........commit to that agent.

I was approached yesterday by a potential buyer, who told me that' they were keeping their options open by working with more than 1 agent" .
My advice:- Same as above.
As an FYI, I've worked with mostly buyers this year & did not get an agreement signed.......never have; as I believe that there is no benefit to either the agent or buyer in being'held' into a relationship.

On the other hand, without some degree of trust & comittment, efforts on both sides remain diluted.

A good agent would prefer to work with a client who respects the comittment of time & effort on the agent's part..
The shortest answer to your question is related to what Value the agent you select ( exclusive or otherwise) , representing your interests as a buyer.
This is a tricky market & a good agent can make for a successful negotiation, transaction & a positive real estate expereince.
Getting stuck with a rookie or an incompetent, greedy, or lazy agent will hurt you.........whether you sign an exclusive agreement or not.
Lastly, substantiate any opinions stated by an agent by asking for relevant data.

While real estate is local & there are some housing markets, where homes are selling & not for too much under a relaistically list price.......it is recommended to substantiate anyinformation you receive to distinguish between 'heresay' and 'analysis'
Good luck
Web Reference: http://www.SoldByShalu.com
0 votes Thank Flag Link Mon Oct 1, 2007
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