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Buyer
Representation
"What
you need to know before
you speak with another Realtor"
By
Greg Schliesmann
There
are several ways you can
approach the home buying
process. First, you can
buy a home yourself and
deal directly with the sellers
or the sellers' Realtor.
Second, you can deal with
an agent who helps you find
and shows you homes but
does not represent you.
In this type of relationship,
the agent's loyalty or fiduciary
duty is legally due to the
seller of whichever home
you end up buying. He is
looking out for the seller's
best interest, not yours,
even though he knew you
before the seller.
The
third option which benefits
you the most as the buyer
is to work with a real estate
agent who represents you
as the buyer. In this case,
the agent's loyalty and
fiduciary duty is to you,
the buyer. The agent works
to help you find the right
home, offers advice, and
helps negotiate the best
deal for you, keeping your
information confidential.
If
you do not work with your
own buyer's representative,
you will almost inevitably
work directly with the agent
representing the seller.
Advantages
to working with your own
buyer representative
A
buyer’s agent can guide
you through the home-buying
process step-by-step and
help you understand your
options at each point. He
can help you find the right
home at the right price,
and help negotiate and protect
your rights in the process.
He can also help you view
many homes quickly because
he has access to all the
homes on the market, instead
of you contacting dozens
of real estate offices and
waiting for appointments
to see homes. Then, instead
of being shown a home by
a salesperson, you will
be looking at homes with
a professional looking out
for your interest.
Even
if you are experienced and
knowledgeable in real estate,
a buyer’s agent can save
you time and money. When
someone gets hurt in car
accident, for example, and
sues an insured motorist,
people almost always get
better settlements from
insurance companies when
they have an attorney. When
a person is not represented,
the insurance companies
may have an attitude of
thinking they are entitled
to terms more favorable
to themselves. Even lawyers
hire lawyers when they have
a legal matter because they
understand this principle.
It is similar in real estate.
When you attempt to
buy a home from a seller
who is represented by a
Realtor, that Realtor knows
he can usually demand stiffer
terms in favor of his client
when the buyer is not represented.
When little bumps or changes
come along during the closing
process, the Realtor will
present solutions that favor
his client. That's his job.
His job is to represent
his client's interests.
His job is not to inform
you of all the possible
solutions to certain problems
as they arise. His job is
to present the option most
favorable to his client.
Don’t
fall into this trap…
Often,
people work with a real
estate agent without realizing
he is actually not representing
their interests. When I
first bought a home, I worked
with a real estate agent
who knew what types of homes
I was interested in and
called me when certain homes
came on the market. She
did not represent me. Fortunately,
I understood this, but it
was a real eye-opener to
the perspective of other
buyers. She tried to form
a relationship with me in
such a way that I would
trust her as my representative
when she really was not.
She gave advice and asked
me questions, which, if
I answered, she would have
revealed to the sellers
to my disadvantage.
For example, let's suppose
you are working with an
agent who does not represent
you and you get together
to write an offer to purchase.
If the agent knows or senses
that you are willing to
spend more than what you
are offering on your first
offer to purchase, she will
probably reveal this to
the sellers. Wisconsin is
actually the only state
where an agent representing
the seller is not supposed
to pass on to the seller “confidential”
information that you share,
but in my experience, most
agents are not even aware
of this and they will do
it anyway. And even if they
do not explicitly say something
to the seller, they will
often “drop hints”. Besides,
what information should
be considered “confidential”
is sometimes a gray area.
The sellers will reject
or counteroffer your first
offer because they know
you are willing to offer
more. This sort of relationship
is often deceptive, and
it is often uncomfortable
to refuse to answer the
questions of this person
you are working with, while
at the same time, if you
do answer them, it puts
you at a disadvantage. In
this type of relationship,
the agent is essentially
a salesperson who is trying
to “feel you out” for the
sellers even though they
often portray themselves
as a trusted advisor. Unless
you have a specific agreement
for an agent to represent
you, the agent does not
represent you. Even if you
have been working with an
agent for months to find
a home, when you eventually
find a home, this agent's
fiduciary duty is to the
seller! I recommend that
you avoid this trap.
Instead,
work with an agent who represents
you. When you work with
the right agent and this
agent represents you, you
are in the driver's seat,
but you also have the advantage
of consultation from an
agent who is working for
your best interest. When
you enter negotiations,
your agent is working for
your best interest and keeps
your information confidential.
The agent's goal is to help
negotiate the terms most
favorable to you. When bumps
or changes arise during
the closing process (for
example, let's say the seller's
furnace stops working before
you close), your agent will
provide important information
to you and inform you of
all of your options.
How
we can help you with no-cost
buyer representation…
You
may be thinking, "Well,
it sounds good to have an
agent represent me, but
how much does that cost?"
Here is good news -- we
offer buyer representation
at no cost to you. We will
represent you, work for
your best interests, help
you find a home, and help
negotiate the best deal
with no cost.
Why
is that? That's because
when someone lists his house
on the market, he agrees
to pay the listing agent
a certain commission. The
listing agent then offers
a percentage of his commission
to other brokers who introduce
a buyer, whether or not
the broker represents the
buyer. Therefore, if we
represent you and help you
buy a home, we would be
paid at closing by
the agent who listed the
home. We simply receive
a part of the commission
the seller already agreed
to pay him. So it is very
beneficial for you because
you receive the advantage
of buyer representation
without paying the fee for
this service. It is a win-win
situation.
It
is important to receive
buyer representation before
you look at a home. If you
go to look at a home first,
before you are represented,
the real estate agent you
want to represent you cannot
receive payment from the
sellers’ agent on that home.
So, you may be able to hire
an agent to represent you
at that point, but the cost
would then come out of your
pocket. Instead of looking
for homes without an agent,
it is to your advantage
that you find an agent to
represent you right away.
The agent will help you
throughout the process including
the process of finding the
right home before negotiations
even come into account.
This way, you will receive
the agent's services without
cost. Even if you are not
committed to buying a home
immediately, you may still
complete the form below
for more information and
to speak with our buyer
agency specialist. You may
also contact us through
our Real Estate Hotline
at 800-677-9627.
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