Gather round, dear home buyers and let me share a story about the epic journey of home ownership. Legend says when offered a free guide through unfamiliar territory, you should take it.
If you're shopping online for that first home, or perhaps your dream home, or ready to downsize into a empty nest, you'll need someone to help you jump from daydreaming to actually making the dream a reality. Just like talking about a mortgage won't make one appear, you'll have to put some effort into getting one, the same thing goes for home shopping.
A local guide who speaks the real estate language, knows the next steps, and who can organize and refine your property search, locate potential homes, schedule private showings, can also act as strong negotiator to craft a deal when you find the perfect home. They also work only for your best interest.
These free guides are known as Buyer's Agents and they help a buyer with all these tasks and more. The best part is, their expertise is FREE to you, the buyer. OK, so, that astrick is not fooling anyone.
Why would a Buyer's Agent work for free*?
Fear not fellow home buyers!. The Buyer's Agents, just like Listing Agents, get paid when the sale closes, the transaction is completed, and a commission is paid out to each brokerage. You, the buyer, do not pay your personal Buyer's Agent a dime. The fee is paid for by the legendary Home Seller. The home seller pays the listing broker, the listing agent, the buyer's broker, and the buyer's agent commission. See how easy it is to clear that free* up?
In Illinois, a Buyer's Agent commission is at no cost to the buyer (also known as FREE).
Why would a home seller want to pay for a buyer's agent to show their house? It is the fastest way to find a ready, willing, and pre-approved buyer to get the home sold. Also, the Listing Agent is not required to work for the buyer's best interest and is not required to help with very much past unlocking a front door.
Without an agent, you'll be on your own to write up the contract, including addendums, negotiate it, handle counter offers, complete the required disclosures and forms, deposit earnest money, schedule inspections, check title, while getting your mortgage loan into processing, packing up your stuff to move, and hoping your employer doesn't notice any absences. (see list below of what a Buyer's Agent does).
So what does a Buyer's Agent do?
They do a lot more than unlock a door and let a potential buyer inside. A Listing Agent may have 300 buyers on their own list, but cannot match the Buyer's Agent extended pool of 10,000+. Buyer agents extend their marketing reach to find 10 times more buyers, giving home sellers a wider buyer pool to tap into, but also to help the buyer through a complicated process by covering essential details the listing agent does not have time for.
Typical tasks for a Buyer's Agent include:
- Set up property searches according to the buyer's personal preferences, price range, and expected move date.
- Personal concierge-schedule a customized list of individual property showings on demand for buyers, including nights, weekends, and holidays.
- Meet clients to personally walk them through multiple properties in their price range, offering expertise on the home's features, the neighborhood, taxes, any special assessments, homeowner's association restrictions, disclosures, and more. Repeat as many times as needed to narrow down to the right home.
- Work with a buyer to find a mortgage lender, work on any credit issues, begin paperwork for underwriting, and get a pre-approval letter or proof of funds.
- Explain the buyer's contract to get the best deal for the market value, including the signing requirements, earnest money requirements, down payment, requests for home warranties, repair credits, closing dates, and any potential contingencies.
- Help craft an offer to purchase a property using current market value, recent closed sales, average days on market, the condition of the home, escalation clause, kick-outs, contigencies, and more.
- Discuss options to a counter offer, or multiple offer situations, or highest and best, and re-negotiate sticking points, and help craft a winning offer for the buyer. Repeat as needed.
- After a contract is signed, inform all parties, suggest local real estate attorneys, property insurance providers, and title companies to ensure proper legal representation, clear title, survey, and no encumbrances for closing.
- Offer assistance to resolve issues on handling contigencies with earnest money, mortgage contingencies, and home sale contigencies.
- Schedule the home inspection, and attend it with the buyers to ensure the home is as expected.
- Schedule the radon test (if requested).
- Deposit Earnest Money for the buyer per seller's direction.
- Resolve conflicts from low appraisals, poor condition, bad inspection, incorrect taxes, defects, and multiple offer situations with credits at closing or ask the owner to repair before closing.
- Follow up with real estate attorney for attorney review letter, including any issues from home inspection report, liens, survey issues, or clouds on title.
- Confirm status with the mortgage lender to maintain closing timelines, clear any issues, and ensure the mortgage completes underwriting.
- Act as a local resource for multiple vendors for moving companies, utilities, long term storage, estate sales, home security systems, contractors, and home warranties.
- Verify closing confirmation 3 days ahead of date with attorney, title company, and lender.
- Schedule final walk through, the day of closing, to meet with the buyers at the property for a final look to ensure condition is as promised.
- Attend closing with the buyers and celebrate!
- Deliver house keys, garage door keys, mailbox keys, and HOA documents
- Follow up to check in and answer any last questions.
Going Solo House Hunting
Many times people want to look for homes on their own, to check out a neighborhood and drive the block and see what it looks like on weekends versus the week (this is a big one for street parking!). Visiting Open Houses and new home builders are great ways to see what's available and the price points. But, you may run into builders or agents asking who you're working with, or worse, they may ask to see your pre-approval letter before showing you a property. Falling in love with a property that you're not able to afford is a disappointing end to your house hunt.
Fear of Missing Out
Buyers do need to see several homes before making a decision. However, waiting a week or more to put in an offer could mean missing out on the right home for you. Running a local market report to understand how quickly the neighborhood is selling is another key item your agent may offer. If homes are going under contract in 24 hours, you'll know you'll need to move quickly when a terrific home hits the market.
Also, some buyers may think they won't be able to find an off market home, for example, a home For Sale By Owner.
Good news! Almost all homes sold By Owner will agree to work with a buyer's agent too, because even the do-it-yourself-sellers understand the importance of a Buyer's Agent bringing a pre-approved buyer to see their home, increases the likelihood of a sale. Using a Buyer's Agent also gives you access to the private listings and hottest new homes to hit the market, which means you may even be the first one to make an offer on the perfect home. With the right personalized letter and an escalation clause, you'll be positioned to win the bidding war and secure your home.
All real estate markets are local, so be sure to talk to someone who is not only a local expert,but works well with your personality, preferences, and time frame.
Now who's got questions on real estate? I can help!
Ask about my FREE Ultimate Home Buyer's Guide!
Jennifer Kinzle, Premier Agent
Charles Rutenberg Realty of Naperville, IL
Fox Valley Homes Specialist, 630-854-4360
About me: I take a deep dive into coffee, chocolate, and real estate in the St Charles and Fox Valley area and enjoy blogging, selling homes, finding great investments, and helping buyers and sellers with all their questions.
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