The Odd Truth About AgentsYou may not believe it.
Remember that when it comes to negotiating a final sales price, the agent does NOT represent the homebuyer's financial interest, under the traditional definition of "agency." Actually, the agent should give you a disclosure form that describes the four types of representation:
Should You Hire a Buyer's Broker?YOU get to pick the arrangement when you hire an agent.
If you do decide to hire an agent as a buyer's broker, you'll enjoy certain advantages. The clear benefit is NOT being at the mercy of agents whose main obligation is to get the HIGHEST possible price for the seller.
If you want your broker to be accountable only to you, and not the seller, then your best choice is a buyer's broker contract.
The Big Break Freedom!
Under the traditional agent-buyer relationship, your agent cannot opinionate about a home's defects, drawbacks or price. A buyer's broker, on the other hand, is free to do all those things. He or she can suggest which home to buy, tell you if the price is too high, and try to get you a break.
Your buyer's broker will not be "muzzled"�you'll get advice to help you get the lowest possible price.
Bargaining for the Buyer's BenefitIt�s part of the package.
The job of a buyer's broker is to represent YOU at the negotiating table, striving to win you the best possible terms and price. Under any other agent-buyer arrangement, your broker can act as a go-between but cannot dicker or negotiate on your behalf.
What's the Real Bottom Line?
Sounds good? In theory, it is. BUT be sure to keep your eyes open when you work with ANY broker, including a buyer's broker. Let's look at the REAL bottom line.
Know What You're Getting Into�BEFORE You Sign the Dotted Line
What Does "No Cost" Really Mean?Is It Real?
Although the job of a buyer's broker is to get you the lowest possible price, that may NOT be the only motivation. Frequently, the seller's broker will agree to split the sales commission with the buyer's broker, equal to a certain percentage of the final sales price. The larger the price, the larger the buyer's broker fee. Agencies sometimes call this "No Cost" to the buyer.
What's the Price Tag?The REAL price tag.
Buyer brokerage fees can be paid either as a flat payment, hourly, or as a percentage of the purchase price. The percentage fee system is actually common and perfectly okay. It all depends on whether you're happy in the end with your home and the price you paid for it.
YOU Set the Final PriceYou are the boss.
Listen to your broker's advice but remember that it's up to you to look out for yourself. Make sure your broker knows exactly how high you are willing to go in a negotiation.
Pay Attention to TermsWhat Are the Terms of the Contract?
You might be asked to sign an agreement to work exclusively with the buyer's broker, and no one else, during your home search. Whether you do that depends on how sure you are about the quality of services he or she will provide. If you're NOT so sure, sign a short-term contract for 30 days that can be renewed if you're still happy with the relationship.
WHATEVER you decide, don't sign anything until you get all your questions answered.
Your Search...Where Do You Find One?
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.
That's the bottom line for buyers on hiring an agent. Know WHO you're hiring and HOW they plan to represent you, and for HOW MUCH. Always look out for your own interests. NO ONE can do that for you!
Next Section�For Home Sellers
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