Why Every Home Buyer should Use A Buyer's Agent

"How Can A Buyer's Agent Help Me?"

A buyer's agent owes the following duties to their home buyer:

* Loyalty * Disclosure

* Diligence * Accounting

* Confidentiality * Reasonable Care

* Obedience

These responsibilities are defined by state law, the REALTORS®, Code Of Ethics and general principles of agency law.

That's the legal definition. But what does a buyer's agent actually do for the home buyer? Like other agents, a buyer's agent will show the buyer available homes, point out the property's features, provide financing information and submit the offer to purchase.

But that's not all. As your representative, a buyer's agent will share valuable and essential information with you, such as:

* Whether the seller would accept a lower price, if known;

* The seller's reason for selling and timetable, if known;

* How long the home has been on the market;

* Previous offers and counteroffers for the property;

* Strengths and weaknesses of the property.

Most important for many buyers, you can ask a buyer's agent for advice and assistance in setting your offering price. What's more, you'll have peace of mind knowing an advocate is bargaining on your behalf to help you buy at the lowest possible price and the best possible terms.

"Who Needs A Buyer's Agent?"

If you want to make sure you buy smart, you need a buyer's agent. If you're a first-time buyer, if you're relocating or unfamiliar with the local real estate market, if you're buying for investment and want negotiating help, or if you need to purchase anonymously, you'll be best served by a buyer's agent who puts your interests first.

Also, if the real estate professional helping you find a home is a relative, close friend, or business associate or you previously were the agent's home-selling client, chances are you'd expect the agent to represent your interests and should establish a buyer agency relationship. Or, if you just want to get the best value in a property and an agent, you owe it to yourself to be the most knowledgeable buyer you can be.

"Can A Seller's Agent Or Subagent Help Me Buy?"

Without a buyer's agent, you're really on your own. Keep in mind, the seller's agent or subagent is actually working for the seller and is the seller's legal representative. Yes, a seller's agent or subagent can offer buyers some services, including a diligent search to find the right home, an explanation of available financing, calculation of monthly payments, estimation of settlement costs, presentation of your offer to buy.

What a seller's agent cannot do is disclose information not in the best interest of the seller such as an opinion of the home's real value or what price and terms the seller would accept.

By law, the seller's agent or subagent must negotiate on behalf of the seller and may not withhold from the seller information that could strengthen their bargaining position. That means you, as a buyer, must not disclose to the seller's agent or subagent any financial or personal information that could be used against you.

"What Will A Buyer's Agent Cost Me?"

Perhaps the right question is, "What will it cost me if we don't use a buyer's agent?" Purchasing a home without representation is possibly the biggest financial mistake you can make.

A buyer's agent can guide you each step of the way to prevent costly mistakes. Failure to find out about defects in the property or the actual value of the property can, of course, be an expensive mistake. And failure to negotiate a contract that works for you can cost you plenty. With a buyer's agent, you can ask for advice and assistance in determining an offering price.

"Who Pays The Buyer's agent’s Fee?"

That depends. Surveys show in most instances buyer's agents are paid like seller's subagents; that is, buyer's agents generally receive a share of the sales commission built into the list price. Many listing agreements between seller and seller's agent indicate whether the sales commission will be split between the seller’s agent and a buyer's agent. That's because most sellers are prepared to pay a commission simply to get their home sold. They aren't concerned whether it's a subagent or a buyer's agent that shares the commission.

There are, however, other ways buyer's agents may be paid. Be sure you understand from the start-before you're shown any properties-how the buyer's agent will be paid.

Remember, the question you really need to ask yourself is: "Can We afford to buy a home with-out a buyer's agent?" For most home buyers today, the answer is "NO!"