Buyer's Agents: Am I Missing Something?

Sue, looks as if you opened up a can of worms! Great information posted here by AR members. I can say that I meet people quite often who decided to "go it alone" and ran into problems. After these folks run into trouble, then they want to come to a real estate professional to dig them out of their messes. It's too late then! As others have said, it doesn't cost the Buyer anything extra typically to have representation--so why NOT use it? Some Buyers are under the false assumption that they'll get a better deal on the home, however.

Sue:  This is a great question!  I could write an entire blog, but would invite you to our website instead.  You have a great list started here.  I will add a few points here:

  1. If the buyer calls the Seller's agent, to see a property, the Seller's agent is working for the Seller and has a "fiduciary duty" to look out for the best interests of the Seller.  This means that any "confidential" information such as the motivation for buying or the price that the Buyer is willing to pay MUST be convened to the Seller as a matter of LAW.  Buyers are not familiar about this duty and it usually will put them at a disadvantage. 

    2. Many agents use the same Purchase and Sales Agreement form for both Buyers and Sellers.  The form may not contain protections for the Buyer.  A Buyer's agent (or en exclusive buyer's agent) will have contingencies that better protect the buyer. 

    3.  Many agents have been trained as listing agents only -- often they do not have the skill set necessary to advocate and "represent" the interest of a buyer.

    4.  The buyer many not have sufficient negotiating skills -- there is more than price to negotiate.

    5.  The buyer may not know how to research a property -- skilled buyer's agent will help them find their way to the building file, and obtain documentation pertinent to the property.  Typically, the seller's agent will provide the deed, tax bill, and seller property information report (disclosure).  There are other important documents that seller's agents typically do NOT provide.  

    6.  The buyer may not have a clue which tests to have in addition to the home inspection, e.g., lead based paint, radon air, water testing if there is a well, flow tests if there is a well., septic inspections by objective inspectors etc. 

    7.  Listing history of the property -- Buyer's agents can provide information such as when the property was first listed, changes in price (e.g. date and amount of price change), whether the property has been listed with another agency before the current listing, whether the property has been under agreement -- and if so, investigate why the transaction did not go forward  -- etc.

   I will leave it at that for now.  I am glad that you asked the question!

      It is important that each party to the transaction have a professional to look out for their client's respective interests with the goal of consummating a successful transaction.

     With regard to confidential information -- a licensee has an obligation to keep their client's information confidential unless the client has given permission to divulge the information.  However, a buyer may not even think to ask a question which the seller  and/or seller's agent would be willing to share --or, by law must share, but only if asked (e.g. has there been a murder or suicide in this house?)! 

   The answer to your question is  - Yes, you would be missing out on not having a professional trained in buyer representation working to insure your best interests are served.  One should look for a buyer's agent with certification such as Certified Exclusive Buyer's Agent or Accredited Buyer's Agent. 

Hi Sue.  I realize I'm a little late to this party, but here is my response.

I've watched hour upon hour of While You Were Out, Sell This House!, Trading Spaces, Filp This House, etc.

I've been to more model homes than I can count.

I've read all sorts of decorating and design textbooks.

Why in the world would I hire a decorator or stager?  I can so do it myself.

That's what I do whenever a prospective client asks why they need me.  I promise not to paint my house, pull my own teeth, fix my transmission, etc, if they promise not to represent themselves in a real estate transaction. 

Buyers agents are the negotiater as well. Most people do not want to offer a price less than asking for fear of making the seller angry. So the buyer agent is the one who does this. Not to mention all the other things the BA will do better than an uneducated person trying to do the job that requires a license.

I can read about LAWS and understand them..However i would not represent myself in court!

There is so much more than can go wrong during a transaction, than inspection, and research on pricing. When that all gets stirred up (as REALTORS know) what will they do then?

Sue - great info here, and if this is being presented at your course, make sure to have the REALTOR give out this info so you avoid crossing the line into licensed brokerage activity.  License laws are very specific and with the info here that has come out in the comments, it would be very easy to cross that line for someone who's not licensed to practice real estate brokeage. 

Great Sue!  Good luck with your course.

Ann

  Hi Sue:  The licensing law in NH (and I think most states) is very clear on what is to be held private and what is not.  It is a matter of education.  Confidential information, may be shared if an agent has permission from the buyer or seller.  If you would like more information on this, let me know.  There is not really any gray.  The New Hampshire Statute and Rules also clearly spell out what disclosures must be made e.g., septic, water, lead paint - you can review these laws and rules (or call the real estate commission and they have a "green" booklet which outlines all of these duties, disclosure and rules on confidentiality.  If you would like some information from a veteran buyer's agent, I would be happy to assist (and I know an excellent one right in Portsmouth who is a member of AR  (Carolyn Mcgee).

 I also call your attention to Renee Burrows blog this week  -- another reason it is good to have a buyer's agent assisting to verify information in the listing, and other documentation.  MLS Integrity: I am really becoming disturbed by these trends!

The duties of an agent on either side is not only to find buyers or find listings, but also to walk their customer thru the process, meeting contingency deadlines and protecting their interests.  And the best part from the buyers standpoint, is they get representation for free!

Sue:  In case some consumers are reading this post, (including yourself) it is not true that buyer representation is always free.  The buyer should check with their agent to find out about how fees are handled.  It is not the same from State to State or even town to town.

With regard to Renee's blog today, I am not sure they are intentional "lies" -- however, it is important that they buyer have someone to lead them through the process to make sure they are getting what they think they are paying for. 

Sue, rules are different in different states and even across the world. But in CA for example, we do need and have buyer's agents and seller's agents.  It would be foolish not to have a buyer's agent just like it would be foolish not you have your own lawyer defend you in court.  But sometimes agents get cut out because people are worried about their bottom line, but those people end up having problems with their homes after the purchase anyways.