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Courses in this Department

Want to Invest in Real Estate?

How to Hire a Realtor

What's the Key to Locking in a Mortgage?

How to Improve Your Credit

Watch out for Mortgage Fraud

Need a Buyer-Broker?

Learn How to Best Insure Your Home and Save Money

Avoid Trouble on Your Kids Mortgage

Downward Direction for Down Payments

How to Hire a Contractor

Save Money by Cancelling Your Private Mortgage Insurance ("PMI")

Crunch the Numbers and Drop Your Private Mortgage Insurance ("PMI") Payments

Who's Watching your Deposit Money?

Remodeling Value: Your Best Investments

More Than One Way to Pay for Remodeling

File Your Income Tax Returns Early and Save Money

Types of Loans Available for the Self-Employed

Top Five Homeowner Tax Saving Ideas


Should You Hire a Buyer Broker?

The real estate industry is expanding its services, by taking advantage of the Internet, national marketing and other consumer friendly options. One of the best of these trends is the buyer-broker agreement. A growing number of buyer-brokerage firms give homebuyers the option of having a professional representative on their side. It means that homebuyers are no longer at the mercy of agents whose main obligation is to get the highest possible price for the seller. It also means that the homebuyer works exclusively with one agent during their home search.

Your agent should give you a disclosure form that describes the four types of representation: buyer broker, seller's broker, dual agent (representing both buyer and seller) or non-agent (representing neither). Remember that when it comes to negotiating a sales price on a home, it's up to you to choose the arrangement. If you want your broker to be accountable only to you, and not the seller, then your best choice is a buyer broker contract. Under any other arrangement, your broker will act as a go-between but cannot dicker or negotiate on your behalf.

The majority of buyer agencies have a policy of "no cost to the buyer" which allows the buyer broker's fee to come out of the normal sales commission paid by the seller. In practice, the listing agent agrees to split the sales commission with your broker, equal to a certain percentage of the final sales price. That means the higher the price, the higher the commission. Listen to your broker's advice but it's up to you to look out for your own interests. Make sure your broker knows exactly how much you are willing to pay for the home.

Under the traditional agent-buyer relationship, your agent cannot opinionate about a home's defects or drawbacks. But if you do decide to hire a buyer broker, he or she will be free to offer criticism and favorable advice to help you discriminate between homes and get the lowest possible price. Some even represent buyers exclusively and do no selling at all in their business. That's another clear advantage over the seller's agent. A buyer agency will provide services most traditional brokerages provide, including advice about property regulations and home financing alternatives.

You might be asked to sign an agreement to work exclusively with the buyer broker during your home search. Whether you enter into an exclusive agreement depends on how confident you are about the individual and the quality of services he or she will provide. Whatever you decide, don't sign anything until you get all your questions answered. Ask specifically how much the broker charges and how he or she will get paid, by fee or commission.

If you look in the Yellow pages, watch for the words 'buyer agency' in the agency's ad. The other source for buyer brokers is through the professional buyer broker associations whose membership is scattered across the country. Check the Internet.