Do I Need a Buyer's Agent When Purchasing My Franklin TN Home?

Do I Need a Buyer's Agent When Purchasing My Franklin TN Home?

Yesterday, I received a call from a buyer who found me through a market report I had written for Franklin TN. I specifically mentioned the importance of working with a Buyer's Agent in that report. His question was, "Do I need a buyer's agent to purchase a Franklin TN home?"

Hopefully the following information will answer his question and clarify any misunderstandings a buyer may have regarding Buyer Agency.

What is Buyer Agency?

In the late '90's real estate laws changed to protect buyers from the common-law practice of caveat emptor ("let the buyer beware"). Prior to this change, all real estate agents worked for the seller. Even if, they were using an agent other than the listing agent.

While sellers benefited from this arrangement, buyers began to question whether their financial interests were being protected. Buyers demanded accurate, factual information, as well as, objective advice. Their demands resulted in a change to agency law and the Buyer's Agent was born.

While Buyer Agency was created to protect the fiduciary interests of home buyers, many still contact the listing agent when purchasing a home. Primarily, because buyers think they will be able to negotiate a better price for the home if they use the listing agent. Actually, that is rarely the case.

Can't I save money by using the Listing Agent?

The listing agent has been hired by the seller to represent the seller's fiduciary interests. The listing agent's commission is negotiated at the time the listing agreement is signed. It is common practice for the listing agent to split that negotiated commission with the Buyer's Agent. However, if the listing agent brings the buyer, then he receives the full commission or both sides of the transaction.

Buyers mistakenly think that commission split will be passed on to them. It is not. Even worse than that, a buyer may actually pay more for a property by using the listing agent. Remember, the listing agent works for the seller. His responsibility is to get the highest sales price for the seller.

By using a Buyer's Agent, you are assured that individual does not work for the seller. The Buyer's Agent works for the buyer. His responsibility is to negotiate the best price and terms for the buyer.

Are there other things I need to know about Buyer's Agency?

There are many contingencies that can be put in place to protect the buyer. The Buyer's Agent will make sure all these contingencies are in place and satisfied prior to closing. He will also provide comparable sales data to assist in determining a purchase price so the buyer doesn't pay more than he should for a property.

What about new construction and For Sale by Owner homes?

It's important to remember the on-site agent works for the seller/builder. He will not provide the buyer with the most recent comparable sales data. The on-site agent's job is to get the most amount of money for the home to increase the seller's profits.

You also want to use a buyer's agent when purchasing a For Sale by Owner (FSBO) for many of the same reasons stated above. In most cases, For Sale by Owners will pay the Buyer's Agent for his services.

Most importantly, the Buyer's Agent will oversee every element of the new construction and For Sale by Owner transaction.

Who pays the Buyer's Agent?

All of this service is provided to the buyer for no cost. The Buyer's Agent represents the buyer but he is paid by the seller. Some brokerages may require a small administrative fee be paid by the buyer but this should be disclosed to the buyer prior to signing any agreement.

The best way to insure that you are protected is to enter into a signed Buyer's Representation Agreement with your Buyer's Agent. This is a contract between the buyer and the Buyer's Agent which clearly outlines the details of your agency relationship.

If you are looking to buy a home in Franklin TN, make sure you have secured the assistance of a Buyer's Agent. Call Tammie White at (615) 495-0752 today with all your buyer agency needs.

Do I need a buyer's agent when purchasing my Franklin TN home?

In a word, YES!!

Be sure to read: 15 Easy Steps to Buying Your Franklin TN Home