Home Buying in San Jose>Question Details

Anita, Other/Just Looking in San Jose, CA

Could someone explain to me how a buyer's agent works? If the buyer's agent is paid by the seller, based on a

Asked by Anita, San Jose, CA Sun Apr 5, 2009

percentage of the sales price, isn't it in that agent's interest to get the highest possible sales price for the seller? As a buyer, wouldn't I want a representative who would either be paid a flat fee or who would make more money if I got the house for less?

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Hi Anita, Allow me to explain fiduciary responsibility in a simple way. First , when a home comes on the market a Realtor will have listed it (the Seller's agent). The Seller's agent has a responsibility to show their client good care and ONLY work in the best interests of their client. The Buyer's agent has that same fiduciary responsisbility to THEIR client. Represent their client's best interest at all times.

Noun
a person bound to act for someone else's benefit, as a trustee
Adjective
of or relating to a trust or trustee [Latin fiducia trust]

You have a point in that we ALL work for the Seller since they are paying us. The difference is this: The Seller has a professional relationship with their listing agent. The Buyer's agent will not likely ever have a chance of procurring referrals from the Seller. Like Patti said, we compete for clients and expect to receive referrals for doing that "great" job. We want OUR client's referrals, period, and "great" agents love to talk about how much we saved our clients or how well the terms suited our clients wishes and needs. Bragging rights rule. :)

Here is a simple picture.......... 1,000,000.00 house = appx. $28,000.00 commission
If you paid 10% TOO much..... 1,100,000.00 paid = appx $2,800.00 increase in commission

When you figure out you paid too much.....that agent will never see a referral from you and that is a loss of, at least, $25,000.00 for a similar future referral. You see what that will do to an agent's future in the Real Estate business? Nothing positive right? For example: Last year my business relied on a 92% referral basis.

Michael
http://www.MichaelRobertsHomes.com
0 votes Thank Flag Link Mon Apr 6, 2009
Most buyers I have worked with have had a good idea of what they want to pay. I have yet to have a buyer who paid more just because I thought they should. In fact, I have had buyers tell me they felt pressured if I asked them to make an offer for whatever amount or whatever reason, with the consequence that they did not get the house they wanted, and spent the next year or so trying to duplicate it. Unless the buyer asks, I let them make the call.I wish our latest troll would explain how to buy a house “without an agent”. Unless he Is advising to only buy FSBO there is going to be an agent who had negotiated a fee with their client.
0 votes Thank Flag Link Mon Apr 6, 2009
Hi Anita - Good question. While there are some agents that act the way you describe, agents who think only of themselves don't last long. Most agents, and certainly the ones I associate with, follow the advice of Brian Tracy, the business consultant: "Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, 'What's in it for me?'" Use your own best judgment and the recommendations of people that you respect when choosing a buyers agent. In the end, no agent can make you pay more than you want. When you are satisfied that you are getting a good deal, accept it.
Good luck,
Roland
0 votes Thank Flag Link Mon Apr 6, 2009
Anita,

an agent, when he signs the agency form, has a fiduciary responsibility to always have their clietns interest in mind. It is a standard of care, they should adhere to, not only on the agency form but it the realtors code of ethics. as well
Web Reference: http://www.mikemoresco.com
0 votes Thank Flag Link Sun Apr 5, 2009
Buyer represents your interest to find you and negotiate the best deal.
A professional agent skilled in negotiation and knows the area is worth more the
trouble. It is professionalism that counts. Quit worrying about someone's compensation
and just focus on your needs.
0 votes Thank Flag Link Sun Apr 5, 2009
Anita- I know it is difficult for people to believe- but we don't really think about making more from a client by getting them to pay more for the house- we want to get them the best deal possible and make sure they are well represented in all parts of the transaction.

The better we take care of you- the more referrals we are going to get. In a business as competitive as Real Estate- the only way to become a success is to have referrals come our way. Find an agent that you trust and they will earn the money they are paid- by the seller.

Patti Phillips
800-680-9133
"Advice You Need, Attention You Deserve"
0 votes Thank Flag Link Sun Apr 5, 2009
A true buyers agent should work for the buyer's best interest. That includes doing a market analysis of any properties that a buyer might consider. An agent should be willing to present any and all offers that a client is willing to put on paper. The reality is, if a buyers agent does his or her job and brings a buyer to the table, they've earned a commission from the proceeds of the sale.
0 votes Thank Flag Link Sun Apr 5, 2009
Number one you want an agent with experience and knowledge. I enjoy getting my clients the best deal possible. The overall difference in lower commissions I make by saving my clients money is far offset by the referals I will get from thast same happy client!!

Glen
Web Reference: http://www.maui4rent.com
0 votes Thank Flag Link Sun Apr 5, 2009
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