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Why You Should Use A Buyer's Agent
One of the best advices I can give a real estate buyers is to purchase a listed property with the use of a buyer’s agent who is experienced in working with real estate investors
Many buyers incorrectly believe that if they don’t use a buyers’ agent they can get the seller to give “them” a 2.5% discount in-lieu of paying the full 5% to the listing agent. This is almost always wrong. A seller enters into a listing agreement with the listing broker for an agreed upon amount or percentage. Once the property is listed on Multiple Listing Service (MLS) that fee is shared with the agent, if any, that sells the property. If the listing agent sells the property…they keep usually the 100%. That means not only do you not get a discount equal to the shared fee, but you also are letting the seller have an advantage in the negotiations and representation.
What exactly is a Buyer Agent?
Buyers' agents are agents who help real estate buyers find the perfect house and are paid by the sellers or builders.
Here's an example. Let’s say that you are in the market to buy a very specific car (i.e. a used 2007 White Cadillac Escalade with white leather interior) and walk into a local dealership to find one. Guess who those "friendly" sales people work for? The dealer, of course! They're all trying to get you to buy using every pressure tactic in the book. Do you feel comfortable? You surely don’t!.
Now, what if you could hire an independent vehicle consultant that can find you that specific vehicle from all the dealerships in the area. Someone to handle all of the negotiation, at your discretion and provide you with a list of cars with mileage, prices, etc at different dealerships. Someone who knows the market and the costs associated with buying this vehicle as well as how long a dealer typically takes to sell this car. All of this info is vital to you getting the best deal! To get all of this at no cost to you, you simply sign an agreement with that individual that outlines the following obligations:
* That the consultant is to look out for your best interest.
* You agree to allow your consultant to be paid a pre-determined finders fee from the dealer from whom you decide to buy.
* That the consultant will help you find the best deal. Performance based compensation. If they don’t find you what you want…they don’t get paid.
* You agree to work exclusively with that consultant. (This helps ensure that there is no pressure on you to buy because that consultant knows that he / she will eventually be rewarded for their effort to help you find what you want).
Now substitute the car for a house and the consultant person for a real estate buyer’s agent and you've accomplished the same thing, which in real estate is known as buyer agency.
Services That Buyers’ Agents offer to their Clients:
*Reliable advice and information is perhaps the key factor in making a "good decision". As your buyer agent, they will provide you info such as, but not necessarily limited to the following:
* The original list price of the house.
* Evaluating improvements in dollars that the sellers may have made to the house.
* Comparative market analysis (CMA) for similar houses in the neighborhood.
* The average difference from list price to sold price.
* How many days the property has been on the market.
* The co-relation between assessed value for tax purposes and market value.
* Introduction to reliable mortgage lenders, home inspectors, settlement attorneys etc.
* You worry about finding the perfect house – they will help you take care of all the small details.
See - How Exactly Does a Buyer’s Agent Get Compensated?
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