They don’t teach this in high school, but maybe they should. The difference between a buyer’s agent and a seller’s agent can be pivotal, yet first-time home buyers have to figure that out on their own. You can read quotes on the web that say things like, “I looked for a buyer’s agent instead of a real estate agent” (true story!) that illustrate how little knowledge is out there. It wouldn’t take much classroom time to explain that buyer’s and seller’s agents are both real estate agents, after all. And while the subject is being explained to the class, I’d put in these five very good reasons for using a buyer’s agent in yout home purchases:
1. There for You
A buyer’s agent is by definition obligated to promote the interests of you, the buyer. When you are being shown a home by a personable real estate agent, it’s tempting to simply go with that agent, who may be quite a nice person. After all, he or she knows the house and knows the seller. But the problem is that the agent is duty-bound to act on behalf of the seller—and in any business negotiation, you want somebody who is unequivocally in your corner. Especially since-
- It’s Free!
A buyer’s agent is compensated through a commission. In this case, it is paid out of the proceeds from the sale price of the house. You’re reading that right: since it issues from the sellers’ proceeds, you get the service for free! Of course, the size of commission the buyer’s agent receives can impact negotiations if the seller thinks the rate is unreasonable. Remember that you can negotiate most things, including agent compensation.
If you rely on the listing agent, he or she can only answer certain questions that don’t transgress their duty to the seller. Issues like price, tactics, and timing can be crucial in striking a good deal—but it is precisely on those kinds of issues that a listing agent is likely to be unable to advise you. Especially if you like the agent, you might be tempted to assume silence on a point means endorsement; and that could be a costly misunderstanding. Again, a buyer’s agent knows the market from the buyer’s perspective, and can provide a wealth of information that point you in the right direction.
4. Your Personal Traffic Cop
In a typical real estate transaction, you will encounter an array of players, including lawyers, the seller or sellers, the seller’s agent, the financial institution, the home inspection team, and on and on. Buyer’s agents keep things running smoothly. They help organize the process so it makes financial and emotional sense to choose your buyer’s agent carefully.