Home Buyer Representation - Buyer Agent vs. Seller Agent
During the past 25 or so years, home buyers have been able to choose between Buyer agents or the Sellers agent representing the Seller, to buy a home from. Many buyers didn't even know that they could use a buyer agent or even if they were available. Most home buyers assumed the agent showing the home represented them. Seller agents were obligated to represent the seller's interest unless they had a separate written agreement with the buyer to represent them.
The FTC did a study of the Real Estate brokerage industry in 1983 and determined that most home buyers actually thought that the Real Estate agent showing them homes was working in their best interest, the vast majority were wrong. The FTC started putting pressure on the states to have real estate agents disclose in writing to the consumers whose side they were representing. In the early 1990's most stated adopted agency disclosure laws requiring real estate agents to finally tell consumers the truth about who they were working for. The NAR endorsed buyer agency as an alternative in 1993.
Today agency is broken down into 3 categories. Seller, Buyer and Limited (Dual). The Real Estate agent has to disclose in writing, which he is representing in the transaction and the other party has to acknowledge their understanding of the representation during the process of buying and selling of a home.
There are three big advantages of having an Exclusive Buyers Broker agreement when you are purchasing a new home.
Unbiased view of the Real Estate Market
Seller agents want to sell you their own property that they have listed. Buyer agents want to show you as many properties as possible to help you make an educated decision.
Negotiate in Buyer best interest
Seller agents typically try to get the highest price they can for their seller client. The higher the selling price the larger their commission and happier their client is.
Savings on Loans and costs
Once a buyer agent has negotiated a purchase contract, then he works hard to save you money on loans, inspections, repairs and closing costs. The buyer benefits by having his agent focus completely on him and trying to make his experience a good one.
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