Pro's & Con's
What Are the Pros?
- Spotting Red Flags: Buying a home without a buyer’s agent is like grilling tenderloin without a meat thermometer—you might not know there's an issue until it’s too late. An experienced buyer’s agent can identify potential problems early on.
- Dedicated Representation: A buyer’s agent is committed to your interests. While both agents can arrange house tours, only a buyer’s agent negotiates on your behalf, oversees the home inspection, negotiates contingencies, and helps you navigate the closing paperwork.
What Are the Cons?
Though the benefits often outweigh the drawbacks, here are two reasons some buyers choose to go without an agent:
- Cost Savings: Many buyers and sellers believe they can save money by not using an agent. While the seller typically pays the buyer’s agent commission (usually 2.25% to 3.5% of the home’s price), this cost is often included in the home's listing price. Therefore, the buyer indirectly contributes to both agents’ commissions.
- Finding the Right Agent: It can be challenging to find an agent who perfectly understands your needs. If you experience setbacks, it might feel like you’ve chosen the wrong agent.
Exclusive vs. Dual Representation
- An agent can represent both buyers and sellers, but many now specialize in one side. Exclusive buyer’s agents focus solely on representing homebuyers, avoiding conflicts of interest with sellers.
- However, dual representation still occurs. A dual agent represents both buyer and seller in the same transaction. “A dual agent cannot provide a full range of fiduciary duties, and all parties must consent in writing. Both buyer and seller forfeit their right to undivided loyalty with dual representation.”
- If your agent shows you a home they are listing, be cautious, as this involves dual representation, “Using the listing agent is like stepping into a courtroom and using the opposing side's legal counsel. Everyone is entitled to their own representation and should have it.”
- In summary, while working with a buyer's agent offers significant advantages, understanding the implications of dual representation and the costs involved can help you make an informed decision.
How to Find a Buyer’s Agent
Discover Your Next Home with Homes-By-Holmes Real Estate
- If you decide to use a buyer’s agent, start by asking your friends and family for recommendations. Real estate agents thrive on their reputations and referrals!
- If you're new to the area or lack personal referrals, search online for local agents. Take the time to meet several agents to find one with reliable credentials who connects with you personally.
- When prequalifying agents, be transparent about your expectations and timeline. Come prepared with these questions:
- Do you live in the area? If so, for how long? You want an agent familiar with the local geography. While insider knowledge of neighborhoods, schools, and development plans is helpful, a good agent will remain objective and refer you to third-party sources for more information.
- How many people have you (not your firm) helped buy a home in the past three years? How many clients are you helping now? Look for an agent with proven success who isn’t so overloaded with other clients that they can't meet your expectations.
- Can you refer me to several mortgage brokers? Ethical mortgage broker recommendations are crucial. Your agent should have a network of trustworthy partners for referrals.
- Do you prefer vanilla or chocolate? See how they respond to curveballs. A sense of humor is a great asset during stressful situations!
- Once you find an agent you like, you may be asked to sign a Buyer’s Broker Agreement committing you to a set period with your agent (usually three to six months). As with all paperwork, read the fine print. Ensure you can break the agreement without notice and/or an opt-out penalty if you become dissatisfied.
