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What does a buyer agent do and will they cost me money?

  • June 18 2014 - US
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Answers (12)

From a Buyer's perspective it is nice to know that you are working with a Broker other than the listing Broker.
  • June 18 2014
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Hi Cal,

If you  can let us know what state you are in you will get a better qualified answer for example In my state, Florida, you can employ an agent to represent only you with full fiduciary responsibilities or you can chose to have the agent work as a transaction agent with limited confidentiality.
 
  • June 18 2014
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Realtors can act as a buyer's agent or seller's agent.  The terminology is really of no real value other then for marketing purposes in our state.  Different states have different rules of agency.  Our # 1  job as licensed Realtors is that we be able to represent the buyer and the seller in a honest and ethical way.  The seller typically pays Realtor commissions and how much that is will be  negotiated between the Realtor and seller before it gets listed.  Once an amount is decided upon, the listing Realtor will put that amount (usually a percentage) into the MLS system so that agents with buyers know how much they will receive if they sell that property.  Buyers really have no good reason to not use a Realtor.  Even if you are buying a for sale by owner, always bring in a professional!  Most sellers are willing to negotiate with us if they know we can get their property sold.

  • June 18 2014
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The duties of a buyer's agent are negotiable between the buyer and the agent, and are usually customized for the buyer's needs.

hpvanc is incorrect about several things, one of which is the terminology: the "selling agent" can be the listing agent, dual agent, buyer's agent, or nobody's agent - they are identified as "selling agent" solely for the purpose of determining who brought the buyer, not for determining agency duties or relationships.

  • June 18 2014
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Profile picture for hpvanc
"buyer's" agents are typically what was traditionally known and still listed in the purchase contract in most states as the Selling Agent. Buyers Agency was added to real estate regulations in many states at the behest of well meaning consumer advocates, unfortunately the reality of how it works in practice is anything but consumer friendly. The term "buyer's" agent has been adopted by real estate salespeople primarily to protect half of the sales commission from negotiation and competitive forces. Unfortunately this has allowed Selling Agents a.k.a. "buyer's" agents to accept a sales commission as a sub-agent of the Listing Agent. Since none of the state regulatory authorities that I know of defined what it means to represent a buyer, the real estate sales industry was able to fraudulently adopt the term and apply a sales definition and apply sales commission compensation to it. In other industries dealing with large sums of consumers money, the current definition of "buyer's" agent would be considered fraud and is illegal (see the Investment Advisers Act of 1940).

So what does a "buyer's" agent do for you:
    1.    Provide a buyer with a single point of contact in the search
    2.    Coordinate the transaction through close

Unfortunately here are some less than desirable traits often thrown in since the "buyer's" agent is identifies and is allowed to act as saleperson:
    3.    Often tries to interfere with your ability to look out for your financial best interests
    4.    Attempts to create a false sense of false urgency in your search
    5.    Pressure to close a deal whether it is a good deal for you or not
    6.    Pushes the selling side interest with regard to market values
    7.    Use sales tactics and market puffery in general against you as the represented party

As to  how much it will cost you, it averages somewhere between 2.5-3% of the sales price depending on your area. Unfortunately real estate agents through collusion and bad state regulations your options on avoiding the cost are limited. If you want to try to do without a "buyer's" agent here are some idea about how to go about it:
    FSBO and flat rate MLS listings willing to offer a discount for an unrepresented buyer
    Try to negotiate a commission reduction with the listing agent as an unrepresented buyer
        (a few sellers do this work for you and include this as part of their listing agreement)
    Find a limited service buyer representative that will rebate (DOJ state rebate laws)
  • June 18 2014
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Buyer's Agents help you find the home, negotiates the deal on your behalf and THEN their job actually starts. They let you know what inspections should be completed, who pays for them, helps schedule them and makes sure things are completed in a timely manner. They will also work with your lender to make sure that side of the transaction goes as smoothly as possible and that all paperwork is acquired in a timely manner. They will protect your earnest money deposit and let you know when and how this money could become in danger of being lost and in turn, help to keep you out of breach of contract during the escrow process. They will negotiate with the seller if there are any repairs that may be required before close of escrow and in general...their job is to help make the process and easy and as less stressful as possible until you see a successful close of escrow.

As the seller pays all real estate commission, you should easily be able to find a buyer's agent at no cost to you.

Good luck!
  • June 18 2014
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Buyers get the opportunity to work with a professional Realtor without charge, since the buyer's agent commission is paid by the seller. The total commission the seller pays for the listing of the home is split between the listing agent and the selling agent or buyer's agent. 
The Realtor uses her/his education and experience to guide a buyer throughout the home purchase process. A Realtor listen to the buyers needs, helps them shop for a home, helps them present the offer, negotiate the offer and guide them every step of the way, making sure all paperwork and work is getting done so, the buyer will successfully close the transaction and move in to their new home. 
  • June 18 2014
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Buyer agents overseas normally charge a service fee.  In this country it is paid by sellers. 
It is important that the duties are clearly defined.


Sam Shueh
Keller Wms Realty
  • June 18 2014
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If the property is being sold by a Realtor, traditionally the seller pays for the sales commissions involved in the transaction (ex: 6% of the sales price).  Consequently, its common for the listing agent to split or agree on a compensation to a buyer's (selling) agent broker who bring a ready, willing and able buyer (ex: 3% of the sales price)

Thus, buying a home through an MLS listed company, will not add any costs should you use an agent that represents your interests.  

Bests,  

Pablo

PS:  Some companies may have admin, brokerage fees charged to the buyer. These are disclosed when you agree to sign a "exclusive right to buy" agreement.  So ask & verify.  Best of luck!
  • June 18 2014
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Profile picture for zuser20140120081814583
Yeah, what he (Mr. Moore) said.  Generally, a buyer's agent will not cost you money, but he will probably save you lots of money, time, and more. 

In almost all cases, a buyer's agent gets a part of the commission that the seller pays to the selling agent; the buyer pays them nothing. 

The buyer's agent is almost always legally & ethically bound to work in the best interests of the buyer (the only exception I know of is dual agency).  So, they use their experience & other resources to help buyers get the best deal on the best house for the buyers' needs & wants.

We bought a house near St. Louis last fall.  Our agent, Shannon Howard, was a huge help.
  • June 18 2014
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Your corect Tim, Buyer agent do work for the best interest of the buyer and they are paid for by the seller i the pricing of the home.  A good buyers agent is a good listener and will preview homes for you to make sure that the homes they are showing you meet the criteria you said was important to you.  They make offers based on comps of other active homes in the neghborhood and recent sales just like an appraiser does.  The buyer is the one that decides on the offer and are the ones who usually come in low as they like to play a little first.  We agents certainly don't need practice writing offers over and over again so it is important that the buyer be confident in us as their agent to help them make a good offer to get them the home they want.  The buyer's agent also gets bids for prospective repairs to the home and for inspection items, writes the contracts, get them where they need to go and gets to share in the Celebration at the Closing!  A good agent is an agent for life, not just for the transaction.
  • June 18 2014
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Profile picture for Outer Banks N C
Buyer agents work with the best interests of the buyer. They will haul you around in their car, show you homes, make ridiculously low offers and counter offers, they will help arrange inspections, obtain documents for the attorney, and lots more and for you it is all   FREE. How could you go wrong?
  • June 18 2014
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