Home Buying 101 - Step 5: Get a Buyer’s Agent
January 19th, 2009 categories: Home Buying 101
This is the fifth installment of my Home Buying 101 series, now updated for 2009.
Previously, on Home Buying 101, I told you about the rights you have as a home buyer and borrower.
Now, it’s time to find a good agent - a buyer’s agent that is.
As a home buyer, you need to have an advocate on your side, looking out for you. Your buyer’s agent will not only show you houses, but will help you locate financing, negotiate on your behalf, educate you on the buying process and the real estate market, set up inspections, locate an attorney and other people who are integral to buying and will help you determine value of the homes under consideration.
A true buyer’s agent will also show you foreclosures, for-sale-by-owner and un-listed properties if you want them to.
Yes, You Need to Sign a Contract
In order to receive the benefit of all of these services and truly be represented by an agent, you will be asked to sign a contract. This contract also ensures that the agent can be paid at the closing.
Note: It is against the law for an agent in Connecticut to show a buyer another brokerage’s listings without a signed buyer agency agreement. For example, if I show a buyer a home listed by RE/MAX West of the River, I must have the buyer sign a buyer agency agreement as my brokerage is RE/MAX Precision Realty.
A savvy buyer may not want to get locked into a long buyer agency agreement with an agent they just met - understandable. A way around this is to ask for a short-term agreement or one that only covers a select few properties. A buyer and agent can look at a few properties together and the buyer can “test-drive” the agent’s approach, industry and market knowledge - something that’s difficult to gauge in a meeting.
If the agent never asks you to sign a contract, then find one who will. If an agent isn’t willing to protect his/her own interests, then they may not be willing to protect yours. Or, that agent has too much free time on his/her hands.
Who Pays the Buyer’s Agent?
A buyer agent’s service is not free. Although most buyers don’t pay anything out-of-pocket for the service, the home seller, through their listing agreement, pays for the buyer agent’s commission and the commission is built into the home price and paid with the proceeds of the closing.
Most of the time, a buyer’s agent only works with the home buyers in a particular real estate transaction and the home buyer can be assured that the agent is working to help you buy the home you want for the best price and terms.
However, sometimes a buyer may sign on to work with an agent who happens to also be the listing agent for a home the buyer wants to buy. When this happens, it’s called dual agency - where one agent represents both the home buyer and seller in the same transaction. Dual agency is legal in Connecticut as long as both buyer and seller are aware that the situation may occur - our standard buyer agency agreement has a clause.
How to Choose a Buyer’s Agent?
You should work with an agent who represents buyers at least 50% of the time. Do not, and I repeat do not, assume that the person who has the most signs in an area or the most ads in a real estate book works with a lot of buyers. Some agents specialize in taking listings and don’t work on the buyers side very often. The only way to know is to ask the agent.
You may also want to look for the ABR (Accredited Buyer’s Representative) designation. This means that the agent attended special classes to learn about buyer representation and had to have a certain number of transactions where they acted as the buyer’s agent.
Where can you find a buyer’s agent? You can look for agents who have the ABR designation here.
Another great place to find an agent is through people you trust - an attorney, an accountant, family, friends, etc.
Or, look no further…I happen to be a a real estate agent:-) Want to know how I work with buyers?
You might also like reading:
Should You Care That Your Agent is A Million Dollar Producer?
How Many Houses Do I Need See Before Finding the One
I can’t help mentioning, you may have missed your true calling: writing!
That said, I have had terrible experiences here in CT with realtors:
1) Having to literally beg agents to show me properties not listed on the MLS ( Sheesh, this is CT where Yankee ingenuity and frugality should be both expected and celebrated).
2) An agent clearly wanted to sell me her own home. She used tactics that were so blatantly aggressive and obvious, I felt my intelligence was insulted. I was given information that was in direct contradition to the press releases of her own agency. When confronted on deceitful claims, I was told I had “misunderstood” what had been said. I refused to sign a dual agency contract and was told I was being difficult. When I expressed my outrage I was told I would not be released from my exclusive buyers contract. Fortunately, I was able to ride out my contract ( my employer was so outraged he offered his own carriage house ).
Real Estate dealings here are so very different from what I am used to.
Wow, I did blather on a bit, thanks for letting me vent.
I started this blog to vent, too.
The issue that agents have with for sale by owner properties is that there is no commission being offered and it’s more work than they want. However, many homeowners are willing to pay the agent the commission. The problem then becomes dealing with the homeowner directly.
I don’t understand agents who won’t release unhappy clients from contracts. I never push folks - if you like me, great. If not, I’d rather have you tell me and part ways then make me miserable for the rest of the contract. I only want to work with people who want to work with me.
Is there any estimate for the number of exclusive buyer’s agents practicing in Connecticut? I went to the NAEBA to browse the directory but I didn’t want to get someone’s hopes up that I was a prospective buyer so I didn’t use the referral link.
I know of two brokers only - number of agents is probably around 10.
Great post Jessica. Did you know a site exists out there for buyers agents to post their buyers… much like an MLS of Buyers! It allows buyer agents to post descriptions of the homebuying wants and needs of their buyers for prospective sellers to see. Of course, none of the buyers contact or personal information is attached to the profile.. only the agent’s. It’s a great way to offer your buyer the opportunity to see homes that may not be officially on the market. It’s really only active in the Phoenix, AZ market right now, but will be expanding out soon.
[…] you’ve located a buyer’s agent, use him/her as a resource for a lender, inspector, attorney or anyone else you may need in the […]
Well I am not sure if accreditation like ABR can ensure quality. Reference from a trusted resource is always the best option.