Why Do You Need a Buyer’s Agent?

At least once a week someone asks me, “Why do I need a Buyer’s Agent?“.

(Because this is a long page, let me get right to the point: why would you pass up a service that is almost always FREE – the Sellers pay the Buyer’s Agent commission in almost all transactions, even though the Buyer’s Agent represented ONLY the Buyer!)

With the huge selection of high-quality real estate websites, real estate search engines with local MLS search ability and Open Houses sprinkling popular (and not-so popular) neighborhoods every weekend, buyers have a tremendous amount of information at their fingertips to help them find a home in the area where they want to live.

Unfortunately, it is very easy to think, frequently incorrectly, that an agent you had a conversation with about a home that you found via one of these options, is representing your interests. This is not the case unless you have specifically arranged or agreed to have this agent represent you. In many states, a real estate agent represents the Seller in any transaction for the sale of property. It is that agent’s fiduciary duty to protect the Seller’s interests to the exclusion of all other interests including their own (and, of course, yours).
Fortunately, in Texas, Buyer’s Agency, also known as Buyer’s Representation, is available to you. Buyer’s Representation allows an agent (usually a REALTOR®) to be your representative and to put your interests above all others. Please see Buying Real Estate in Texas: Your Right to Buyer Representation to understand more about your rights to representation in real estate transactions in Texas.

Here are some examples to help you understand some common situations:

• You visit an Open House in a neighborhood where you want to buy a home. You chat for a long time to the agent that is hosting the Open House and because you love the home, you want her to write up an offer and present it to the Sellers.
• You find a house advertized for sale in the newspaper, on an Internet website or in a magazine. Or perhaps you find a home you like while driving around. You make an appointment with the Listing Agent to see the house – the Listing Agent’s contact information (or brokerage contact information) is usually the only contact information you will find listed with a property for sale.
• You visit a builder’s model home and fall in love with an available lot and floor plan.

In each case:

• Although the agent showed you the property and answered all of your questions, the agent represents the Sellers, not you.
• You should know that unless you have a written agreement for the brokerage that the agent works for to act as an intermediary in the transaction, the agent represents the Sellers, not you.
• You may end up paying too much, or you may not be able to successfully negotiate an agreement that is as beneficial that it could have been had you had someone representing your fiduciary (financial) interests in the transaction.
• If you revealed any pertinent information to the agent, she is required to provide that information to their client, and that information can hurt the strength of your negotiating position.

You can avoid these common pitfalls by engaging the services of a Buyer’s Representative (Buyer’s Agent).

After interviewing one or more agents, you will execute an agreement that clearly states that the agent you have selected represents YOU. The agreement should also clearly state how the situation will be handled if your agent finds you a property that is listed for sale by an agent who works for the same brokerage (i.e., in the case of a potential intermediary relationship). By engaging the services of a Buyer’s Representative, you also gain access to:

• Loyalty, Obedience, Disclosure, Confidentiality, Reasonable Care and Diligence and Accounting, all of which are fiduciary duties owed by a Buyer’s Representative to his or her principal (or client), meaning to you.
• Real Estate Market Data for the area where you intend to purchase a home. This will help you to understand what similar properties in the area have recently sold for, as well as the overall trends for home values in the local market. This may be provided in the form of a CMA (Competitive Market Analysis).
• Information your agent can glean about the Sellers that can help strengthen your negotiating position. (The agent, of course, may not reveal any information she may have that was acquired during another confidential transaction or relationship.)

When you choose me to represent you in as your Buyer’s Representative, you will also receive:

• Listings emailed to you based on your preferred search criteria. If you want, I’ll pick through them first and weed out the ones that may superficially meet your criteria but have serious compromising issues, such as a considerable amount of deferred maintenance.
• A personal chauffeur (yes, me) to drive you to the listings that made it to the top of your “Go See” list.
• A sounding board for your interests, worries, plans, and dreams with regards to buying a home (really, just about any topic!!).
• Strategic planning sessions for finding what you need, when you need it. Strong negotiations representing your position and your intentions in each transaction.

When I agree to work with a client as a Buyer’s Agent, we execute a Buyer’s Representation Agreement at the beginning of the home search process. This agreement spells out the responsibilities I have to the Buyer in straightforward language and makes sure that there are no questions about where my loyalties are. It also offers the Buyer (YOU!) a choice with regards to how they would want the situation to be handled if we find the perfect home and that home is listed by an agent in my office (or even by me). Up-front disclosure is key – you have a right to be informed of your rights with regards of representation in a real estate transaction!

If you have any questions about Buyer’s Representation, please give me a call at (512) 585-4758, or send me a note via the on-line contact form and I will be happy to answer your questions!