Buyer's Agent: To Use or Not To Use

I work in a very competitive Real Estate Market here in Manhattan and yet many individuals are confused about whether or not to use a Buyer's Agent when purchasing a home.  We educated our buyers on the reasons why to use a Buyer's Agent and then show them how we can accomplish all of this for free. 

This discussion is open to agents as well as Buyer's, what do you think.  Do you think you need a Buyer's Agent? 
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June 23 2012 - Midtown
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All you have to do is monitor any of the buyer forums on Zillow when "the seller did this now what?" questions come up.  It's obvious in today's complicated real estate market that not having an agent when making a purchase puts a buyer at a huge disadvantage.
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June 23 2012
Profile picture for SoCal Engr
Is a buyer's agent needed? Not always.

Is a buy-side REA free? Not really. Their cost is included into the overall transaction cost. So, the cost is really deferred/hidden (i.e., included in the cost of the house and subsequently financed), not "free".

Does it really matter? Not in the majority of RE transactions in today's structure. The commission for the buy-side REA is typically paid out of the seller's proceeds (harkens back to the notion of "deferred"), so the typical buyer realizes little-to-no financial gain by not utilizing a REA's services.
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June 23 2012
I think anyone looking to buy a home should use an agent.  There are many things a buyer wont know because they lack the experience of a professional agent who can walk them through the process from the signing of contracts to the closing table.  Its always good having some one looking out for you.
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June 23 2012
It all depends on comfort level of a Buyer and professionalism of a Buyer Agent :-) 

Some investors are very knowledgeable about the market and the real estate industry and are fine purchasing directly from the listing agent. However, not all Buyers have the time and expertise to purchase on their own. Majority of Buyers do benefit from working with a Buyer Agent. 

Not all Buyer Agents are equal. The key is to hire honest, trustworthy, professional Buyer Agent, preferably ABR, Accredited Buyer Representative, who understands Buyer Agent's obligations and fiduciary duty to the Home Buyer.
  
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June 23 2012
Profile picture for user1635772
We made an offer of $2,000 more than a previously accepted offer, but the previous transaction failed due to the other buyer's loan.

Our offer of $2,000 more was contingent upon the seller paying the closing costs. Our buying agent without really providing any rationale for our offer to the seller emailed the following to the seller's agent.

"It will probably not work for your seller but I keep my fingers crossed "

In our opinion, this was very unprofessional.  It makes us, as the buyer, look bad.  I am planning to contact the selling agent directly with our rationale.
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June 23 2012
As a buyer you should NOT contact the listing agent directly - it will only make things more complicated and you might inadvertently reveal some personal or financial information that .... the listing agent may use against you and it will only make your buyer agent's job harder. 

"It will probably not work for your seller but I keep my fingers crossed " 
This sentence written by your buyer agent (also called selling agent - listing agent represents the seller) does not imply anything IF your agent was responding to the information disclosed by the listing agent that Seller cannot afford or does not wish to pay for Buyer's closing costs. 
Sellers are NOT obligated by law to contribute to buyers closing costs and can authorize the listing agent to disclose this information. 

All YOU, as a Buyer, have to do is insist on $2,000 closing cost help - it is up to the Seller to agree or decline the offer. 

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June 23 2012
Dear Socal_Engr,

In resposne to:

Does it really matter? Not in the majority of RE transactions in today's structure. The commission for the buy-side REA is typically paid out of the seller's proceeds (harkens back to the notion of "deferred"), so the typical buyer realizes little-to-no financial gain by not utilizing a REA's services.


I think that you have made some valid points, however, I do feel that you have forgotten about something very important.  The Buyer's Agent is always working in the best interest of the buyer.  Here is a for instance.  You are a buyer of high net worth, you start negotiation with your Seller's Agent.  If that agent finds out your net worth before accepting an offer, he has no obligation to keep that information disclosed.  You now have lost all negotiating leverage and cannot get the best deal.  Do you think that working with a Buyer's Agent would be important then?

All the best,

Ryan

I always appreciate your responses!
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June 25 2012
 
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