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Buyer's Agent: Real or Marketing

By
Real Estate Agent with Equity Advisory Group

We are starting to hear the term 'buyer's agent' more and more these days.  Someone asked me if the whole thing wasn't just one more way for realtors to market themselves, especially in such a challenging market. 

The answer is no...

A "buyer's agent" is a real estate agent who has entered into a written agreement to represent the interests of a party (or parties) who intend to purchase property.  The buyer's agent helps the buyer to clarify his or her specific needs, secure financing, locate appropriate properties, identify and understand needed repairs or maintenance, negotiate the best possible purchase price, hire service providers (e.g. home inspector, closing attorney), and generally guides and advises the buyer through the entire process.  The buyer's agent is legally and ethically obligated to look out for the best interests of the buyer, to disclose any and all information about the property or the seller, and to diligently protect the buyer's confidentiality.  As a rule, the buyer does not pay a fee for these services.

It is not at all just a marketing tool for agents.  In fact, most agents tend to focus on acquiring listings and often don't even adequately inform buyers about the benefits of buyer agency as it is often not in the AGENT's best interests to do so.

When a listing agent enters into a contract with a seller, there is an agreed-upon commission % to be paid by the seller at closing.  If the buyer is represented by another agent, the listing agent must split that commission.  If an unrepresented buyer contacts the agent directly and agrees to purchase the property without representation, the listing agent keeps the entire commission.

In that scenario, the listing agent owes all of the loyalties described above to the SELLER and is effectively operating AGAINST the buyer's best interests. 

Thus, even though agent's are legally obligated to disclose these facts and (in my opinion) ethically obligated to make sure that a buyer understands all of the ramifications, it is easy to see how this is often at odds with the financial incentives.  Do yourself a favor, and find an ethical, competent, trustworthy Realtor to act as your buyer's agent before you even begin to look at property!

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