If you’re thinking about buying a home, you’re likely going to enlist the help of a professional real estate agent. But did you know there is a difference between buyer’s agents and seller’s agents? In today’s post, we’ll talk about buyer’s agents and what they do to help the home buyer throughout the process of purchasing a home.
When you hire a buyer’s agent, you’re hiring them to guide you through the home buying process — from viewing homes for sale to researching neighborhoods and land values, to helping you understand the financing and closing process and more — all while answering your questions along the way. Indeed, a good buyer’s agent is worth their weight in gold, providing invaluable service and insight into a world most of us only get a glimpse of a handful of times throughout our lives.
It is important to note that buyer’s agents are legally obligated to work in the best interest of the home buyer. In other words, a buyer’s agent should always provide you with any and all information pertaining to any home you’re considering. They should provide you with helpful advice during all stages of the process, including viewing, making an offer and negotiating. By contrast, a listing agent (or seller’s agent) has a fiduciary responsibility to work in the best interest of the seller.
Listing agents are committed to represent the home seller and are obligated to share any and all information pertaining to the potential sale of the home with them. Let’s use an example to illustrate:
Let’s say you are a home buyer who attends an open house. The listing agent is there, hosting the open house and showing you around, talking up the home’s best features. And let’s say you are really interested in the home, so much so that you tell the listing agent you’d love to make an offer. But, you let it slip that you need to act fast because the lease on your apartment is about to expire. Now that the listing agent knows you’re in a hurry, he or she will share this information with the seller. This is a valuable piece of information to the seller, since it indicates that you are likely not going to have time to negotiate. The listing agent will most likely encourage the sellers not to budge on their asking price, since you’ve made it clear you’re eager to make a move.
On the other hand, if you had expressed these concerns to your buyer’s agent, he or she would have kept this in confidence and encouraged you to do the same when interacting with listing agents or home sellers. By that same token, if your buyer’s agent finds out that the home sellers are eager to sell quickly, they will share that information with you.
Signing a Contract
When you hire a buyer’s agent, you will most likely be asked to sign a contract known as an Exclusive Buyer Agency Agreement, which outlines the details of the agent’s services and their compensation. Buyers do not have to pay their agents, as the agent’s commission is paid for by the seller. In most scenarios, the commission equals about 6% of the home’s total sale price and it is split evenly between the buyer’s agent and listing agent.
When you sign the Exclusive Buyer Agency Agreement, you are committing to working with the agent exclusively. In other words, they will be your sole real estate representative during the home buying process. Because this is a legally binding contract, it is important to consider multiple agents before hiring one.
What to Look for in a Buyer’s Agent
A good buyer’s agent should be professional, easy to communicate with, friendly and knowledgeable. Experience is always a plus, too. If your home buying needs are a little complicated, for example, if you’re looking for something in a very specific area with very specific features (say a .
You can start looking for a buyer’s agent by getting recommendations from friends or family, or you can search online for licensed realtors in your area.