Real estate - buyers agent?

[Golf4food]

Anyone have experience using a buyers agent when shopping around for a new home?

 

[Lisa_M]

we had a buyer's agent. We didn't end up buying a house, but we had an agent through Century 21. We had to sign a paper saying that we would pay Century 21 $250 if we bought a house and if we bought one that wasn't offering a certain pertcentage of the sale to the buyer's agent we would have to pay our agent the difference.

When we were looking we couldn't really afford much, which is why we didn't buy and our agent wasn't as available as I would have liked her to be. I think it was because why would she work hard for our 120k sale when she could work hard for everyone elses 300k sale. I think having a buyer's agent is a good idea because that person will put your interest above that of the seller. I would never go with a dual agent because in the homebuying process there is no way that person could be looking out for the best interests of both parties.

 

[bellarella]

There is absolutely no reason to pay for or sign a contract with an agent as a buyer. It's just another way for agents to try to make money while they see their bread and butter being hedged by the internet.

I agree that it is best to avoid dual agency, though I always think of any agent as a dual agent, even if their offices aren't representing both sides. Agents are paid by splitting commission. The higher price I pay as a buyer the more *both* agents, no matter whether there is a dual agency agreement or not. And it is always in the best interest of the agent (not necessarily their clients) for a house to close.

 

[missj1975]

I bought a house in June with a buyer's agent. I never signed any contract with him. He did an absolute great job and showed me several houses before I found the perfect one for me. I am not for sure how he made his money because I know I never paid him a dime. I did refer a friend to him and he sent me a $50 giftcard. I love my house!!!

 

[JandJ]

My DH bought our house before we were married and he used a buyer's agent. She was good and we love our house. He did not sign a contract or pay her anything up-front, but we paid her a commission at closing.

 

[Maggimus]

it absolutely does not cost you one dime to use a buyers agent! I just wouldnt sign a contract with them that binds the two of you. This way if you decide that you dont like that agent, you dont have to use them anymoer and can find another.

The agent doesnt make any money off of you.... they make money off of the comission of the house that is on the market-- it comes from those sellers. Whether you use an agent or not... the money will go somewhere (if its on the market with an agent that is).

If you buy the house without an agent-- then the listing agent gets the full commission.... if you bring your own agent and its different than th elisting agent-- they split it... either way you dont get any of the money and none of it is saved.

It doesnt cost the buyer a thing-- again all I would suggest is to NOT sign a binding contract making them your buyers agent-- you may end up not liking them or think they dont work hard enough for you. The buyers agent only makes money if they sell the house--

 

[JandJ]

Thanks for clarifying that Maggimus (BTW nice to see another wedding board girl on the budget boards ). That's what I meant, our buyer's agent got paid a commission at closing but no, we did not pay her. We also did not sign a contract with her so we weren't tied to her if we found a house ourselves or something.

 

[100 acre wood]

There is absolutely no reason to pay for or sign a contract with an agent as a buyer. It's just another way for agents to try to make money while they see their bread and butter being hedged by the internet.

I agree that it is best to avoid dual agency, though I always think of any agent as a dual agent, even if their offices aren't representing both sides. Agents are paid by splitting commission. The higher price I pay as a buyer the more *both* agents, no matter whether there is a dual agency agreement or not. And it is always in the best interest of the agent (not necessarily their clients) for a house to close.

There is indeed every reason for a buyer to have a buyers agent. Whether or not you have signed a buyers agency contract, the commission is being paid by you, so you might as well pay to have yourself represented. If youbuy a house without a buyers agent, the sellers agent automatically becomes a dual agent and is not really representing the buyers side as well as should be. The buyer is the one paying the commission, the commission generally comes out of the proceeds of the sale of the house, so who ends up paying really? The buyer. The seller has already computed how much they want out of the house and the commission falls into the equation of the net gain of the sale.

 

[Darcy03231]

We used a buyer's agent and didn't sign a contract or pay anything. She was paid a percentage of the realtor's commission at closing. She did a great job and showed us many properties that met our criteria.

 

[lost*in*cyberspace]

We used a Buyer Agent when we bought our house last June. She was great; we found our house after only a few days of searching.

We did sign a contract, however did not have to pay her anything, she and the seller's agent split the commission at closing.

I would never use a dual or seller agent. You can get a referral to a buyer agent in your area here:

http://www.naeba.org/

Note I am not affiliated with this association in any way; just used them to find our agent.

There is indeed every reason for a buyer to have a buyers agent. Whether or not you have signed a buyers agency contract, the commission is being paid by you,

Not true, the SELLER pays the commission, not the buyer.

 

[bellarella]

There is indeed every reason for a buyer to have a buyers agent. Whether or not you have signed a buyers agency contract, the commission is being paid by you, so you might as well pay to have yourself represented. If youbuy a house without a buyers agent, the sellers agent automatically becomes a dual agent and is not really representing the buyers side as well as should be. The buyer is the one paying the commission, the commission generally comes out of the proceeds of the sale of the house, so who ends up paying really? The buyer. The seller has already computed how much they want out of the house and the commission falls into the equation of the net gain of the sale.

I didn't say that you shouldn't have a buyers agent. I said you shouldn't *pay* or *sign a contract* to get a buyers agent. These are two new "trends" in the real estate world. Trying to get buyers to pay and commit themselves to an agent who is already being compensated through the commission on the sale.

I also said that formal dual agency is a bad thing, but on top of that I don't think any buyer should be lulled into the notion that just because they have a buyers agent (paid or not) that agent is really "theirs." Even if they have no representation ties to the other side, as you said they are getting paid out of a commission based upon the sale price of the home & the fact that the sale actually closes. That puts the buyer's interests (of getting the lowest price for the home possible and making sure that any and all defects are brought to light and remedied) in direct conflict with their agent's bottom line. Not to mention the real estate world is generally a world built on relationships between agents, which means an agent's long term business will be more hurt by ticking off a fellow agent than a single client.

Just because an agent isn't a dual agent doesn't mean that they are actually looking out for you as the buyer. Ethically they are supposed to. But the *entire* financial system is stacked against that actually happening. Back to the phrase "Caveat Emptor" Buyer Beware. I never trust a real estate agent to be looking out for my interests. Everything I tell them I fully expect to get back to the seller in some form or another. My buying strategies, actual motivations, timelines, bottom line, etc. are held close to the chest and are not given to my agent except at those times where it is in my best interest for them to be revealed.

 

[100 acre wood]

We used a Buyer Agent when we bought our house last June. She was great; we found our house after only a few days of searching.

We did sign a contract, however did not have to pay her anything, she and the seller's agent split the commission at closing.

I would never use a dual or seller agent. You can get a referral to a buyer agent in your area here:

http://www.naeba.org/

Note I am not affiliated with this association in any way; just used them to find our agent.



Not true, the SELLER pays the commission, not the buyer.

Yes the seller pays the commission from the PURCHASE price of the house. The buyer purchases the house, the money is ultimately coming from the buyer, believe it or not

 

[bellarella]

Yes the seller pays the commission from the PURCHASE price of the house. The buyer purchases the house, the money is ultimately coming from the buyer, believe it or not

No, it is very literally and legally coming from the seller. The seller is responsible for paying the commission. Yes, most sellers set their price to cover their commission fees, but ultimately market conditions set the sale price of a home. If a seller ends up upside down on their mortgage, they (not the buyer) will have to open up their checkbook to cough up their commission fees.

But yes, buyers should be sensitive to the commission component of the real estate transaction because it means that *their* agent, dual or not will get paid more if they pay more. A big disincentive for an agent, whether they call themselves a buyer's agent or not, to actually be looking out for the buyer. The way the economics of real estate works, pretty much all agents are sellers agents, no matter what "side" of the deal they are technically on.

 

[cats mom]

My understanding is that when you work with an agent who is not specifically a buyers agent, even though he/she is taking you around showing you houses and such, technically they are a sub agent working under/for the sellers agent.

Since the commission comes out of the sales price of the home and is normally split 3% to the sellers agent and 3% to the buyers agent, in the past in cases where things may have gone sour, legally there have been questions of who had a fiduciary duty to whom.

I think most buyers agents actually still do the commission split thing, but there are some who have chosen to structure their fees differently and do have the seller pay a set amount instead.

 

[100 acre wood]

No, it is very literally and legally coming from the seller. The seller is responsible for paying the commission. Yes, most sellers set their price to cover their commission fees, but ultimately market conditions set the sale price of a home. If a seller ends up upside down on their mortgage, they (not the buyer) will have to open up their checkbook to cough up their commission fees.

But yes, buyers should be sensitive to the commission component of the real estate transaction because it means that *their* agent, dual or not will get paid more if they pay more. A big disincentive for an agent, whether they call themselves a buyer's agent or not, to actually be looking out for the buyer. The way the economics of real estate works, pretty much all agents are sellers agents, no matter what "side" of the deal they are technically on.

I say tomatoes and you say tomatooes..
Anywho, anyone signing a buyers agency agreement should make certain to read all of the it before they sign it, of course. There is a clause in some states where the buyer will compensate their agent if their agents commission is not covered by the sellers offering of commission. Buyer Beware but you would want your own agent for sure.
I believe there have been articles written on the inflated prices of the recent past and how commissions were one part of the cause.

 

[keishashadow]

I didn't say that you shouldn't have a buyers agent. I said you shouldn't *pay* or *sign a contract* to get a buyers agent. These are two new "trends" in the real estate world. Trying to get buyers to pay and commit themselves to an agent who is already being compensated through the commission on the sale.

I also said that formal dual agency is a bad thing, but on top of that I don't think any buyer should be lulled into the notion that just because they have a buyers agent (paid or not) that agent is really "theirs." Even if they have no representation ties to the other side, as you said they are getting paid out of a commission based upon the sale price of the home & the fact that the sale actually closes. That puts the buyer's interests (of getting the lowest price for the home possible and making sure that any and all defects are brought to light and remedied) in direct conflict with their agent's bottom line. Not to mention the real estate world is generally a world built on relationships between agents, which means an agent's long term business will be more hurt by ticking off a fellow agent than a single client.

Just because an agent isn't a dual agent doesn't mean that they are actually looking out for you as the buyer. Ethically they are supposed to. But the *entire* financial system is stacked against that actually happening. Back to the phrase "Caveat Emptor" Buyer Beware. I never trust a real estate agent to be looking out for my interests. Everything I tell them I fully expect to get back to the seller in some form or another. My buying strategies, actual motivations, timelines, bottom line, etc. are held close to the chest and are not given to my agent except at those times where it is in my best interest for them to be revealed.

As a Realtor I'm not sure whether to be amused or feel sorry for you, assuming you've had a bad experience. NOTE I said REALTOR NOT Real Estate Agent; whole different breed apart. Education, code of ethics, training, etc.; you get what you pay for...

BTW, if anyone ever has a problem with an agent, and cannot resolve it; immediately ask to speak to their sales managaer...will usually do the trick.

A successful agent relies on referrals, from satisfied customers. Anyone who is not reputable will soon leave the business one way or the other.

Don't forget there is the listing agent/agency & the selling agent/agency in all transactions involving a listing; wherein the commission is negotiated (yep, they aren't written in stone) beforehand. The commission will be paid regardless of who represents the buyer (or extraordinary circumstances arise).

Most of us work solely on commission; we do have an overhead to cover. Never forget while we luv our job, it's a business and we need to be successful.

good luck on future success in the real estate market.

 

[surfgirl]

btw, there has been lots of discussion about 'don't sign a contract'.

If a agent ever sends you a "TREND" report, before you can view the listings that the agent has sent, you are clicking through a form - basically, it is a contract.

Just like with listing a house, any good agent will terminate a contract early if there are personality issues or problems.

Also, if you walk into an open house and don't tell the listing agent that you are represented, if you bring an agent to make an offer, they can argue that you aren't represented by that agent and deny their commission. They will claim 'dual agency'.

My sil bought a house that she found and had a lawyer represent her, so instead of giving the listing agent both halves of the commission, she negotiated a lower price on the house (after offers, etc.) due to the fact that the agent was acting as a dual agent.

I'm not in the industry, just have bought a sold a few houses in the last 10 years.... good luck!

 

[Tinkerbelle99]

I echo the statement made by keishashadow in regards to there being a HUGE difference between a Realtor and Real Estate Agent.

As with everything the more homework you do, the more satisfication you will ultimately have. Even if you have to terminate a relationship

The in's and out's of real estate do vary from state to state. For example, in some states, the Realtor and/or agent needs to declare 'agency'. Agency is basically stating who the Realtor or agent is representing in the transaction. In some states, the Realtor or agent automatically represents the seller and will work in their best interests (getting a deal as close to their terms/price as possible). If you want a Realtor or agent to represent you as the buyer, you will have to sign a Buyers Agency Agreement. This is a contract you are signing, so you do want to read it carefully. There isnt much to it, its pretty straightforward. There is an area to fill in the length of this agreement, that is something you can determine between yourselves and the Realtor or agent. It can be for one day or one year and anything in between. There is a spot to set in a fee you may owe the Realtor or agent if you, lets say purchase a property during the time of your agreement thru someone else.

As a buyers agent, your Realtor or agent, is working in your best interests(getting you the best deal on your purchase). If during your contact you find that you are not clicking with your Realtor or agent you can ask them to void the contract. They will usually comply, as they do not want to be in a non productive relationship. If you dont feel your getting thru to that Realtor or agent you can ask to speak to their office manager and/or broker. Your issues will be resolved one way or the other.

Realtors and agents work on commision and they are many fee's and overhead that they incur, month after month, wether or not they have a sale. they work for free until they are lucky enough to have a sale.

 

[T. Lynn]

Realtors and agents work on commision and they are many fee's and overhead that they incur, month after month, wether or not they have a sale. they work for free until they are lucky enough to have a sale.

Totally agree with this statement as I'm a new Realtor. Who would work for free and not knowing when the first paycheck will come...we do. Even if we list a house, pay for marketing and advertising and if that home doesn't sell, we made ZERO.

Please keep in mind that some agents won't represent you as a buyer without a contract. It kinda secures themselves as well. We just had a new agent who didn't do this with their potential buyer. They took numerous weekends showing houses, going over every detail and didn't have a contract signed because they felt secure. The buyers ended up finding a house and calling the listing agent and finalized everything. They may have not known how the agent got paid either. Anyway, this agent spent so much time with these buyers and really helped them out and ended up with nothing but lost time, lost money and a learning experience. They were very hurt as they spent numerous hours away from their family to help someone out who was really in need.

Do read over the contracts. I know with our buyer contract, there is just a small transaction fee ($200) but it's not paid until settlement. If there's no settlement, then you pay nothing. Most can be a set time frame as well. We can do a contract on just one property, 1 week, 1 month, 1 year, etc...it's what myself and the client agrees upon. As a Realtor, I work hard for my clients. As someone previously stated, we rely on referrals. If your not happy with your Realtor, normally you could get out of a contract by having it in writing and both parties agreeing. I would never want to work with a client who was unhappy with me. I won't be doing them or myself any justice. Some people may not click for whatever reason.

You could also do a trial basis with that Realtor or stipulate that the contract can be voided if you request it in writing. Normally there is a section to spell out these extra terms.

There are Realtors out there just for the sale but some do care. I was a stay at home mom before I started my new career. It's definately challenging and hard to get started. Many hours of studying, researching, figuring out your marketing, prospecting, etc. Some people know that you are new and don't want to give you a chance. Then again, we want to work harder for our clients to make them happy and to help us get an income.

Anyway, good luck with your decision and keep us all posted! It will all work out in the end.