Have you used a Buyer's Realtor?

[itsmyparty]

We have had very little experience in real estate...our house was purchased straight from the builder 26 yrs ago. We are considering moving within the city...to a place with a smaller yard, newer, less upkeep, etc. Have seen a couple of houses on Zillow..and they make their $ I think from advertisements from buyer's agents. I looked at the real estate websites associated with the houses...and no particular real estate agent is attached. A few questions...if we do get a hold of a r.e. agent and they show us the house...are we obligated to use them then? Not sure why the buyer's agent is an advantage when their income depends on how much the house is purchased for. Of course too, we'd be selling our present home. Any info, guidance you've had would be very appreciated!! Thanks!!

 

[pb4uski]

Buyer agents are not very prevalent around here. I've never used one but have only bought 4 properties in my life and sold 3. Two of the 3 sales were FSBO. The one we used an agent on was out-of-state about 200 miles away.

Around here most real estate agents represent the seller. Buyers typically find an agent that they like and they do a lot of legwork in filtering houses that meet the buyer's criteria, arranging showing, hand holding, etc. If the house sells typically the selling agency gets half the commission and the listing agency gets the other half. If the selling agency happens to be the listing agency then they get the full commission.

 

[Ready]

If you know the local market well you can represent yourself, and when you approach the seller's agent, you can try to negotiate a better price since the agent will not have to split their commission with the buyer's agent.

However, the Seller's agent is really there to represent the seller and get them the maximum price possible. They can sign an agreement stating they are representing both buyer and seller, but I think it's very difficult for most agents to represent both sides equally.

If you don't know the market well, it would be to your benefit to sign up with a local agent who really knows the market. They may have local information on the listings that could give you an advantage. In theory the service is free since the seller's agent splits the commission. And, their job is to get you the best home for the lowest possible price, so they can help you with the negotiations, if you don't care to deal with that yourself.

One other point, I find that seller's agents don't always take buyers seriously when they are not represented. They should...but real estate agents can be a little set in their ways sometimes.

 

[pb4uski]

Is the OP trying to differentiate between using an agent or with using an agent that they engage and pay for (which I understand is customary in some parts of the country)?

 

[itsmyparty]

Is the OP trying to differentiate between using an agent or with using an agent that they engage and pay for (which I understand is customary in some parts of the country)?

No...didn't intend on paying for any buyers realtor's services...outside of the commission they normally get...which is I guess would be when they split it with the seller's agent. I'm thinking/hoping they would be glad to be part of a deal if they weren't the selling agent...and would get half instead of nothing....but still it seems they would benefit from the house being sold at a higher cost. Has anyone paid a buyer's agent?

BTW...thanks too for everyone replying!!

 

[Dimsumkid]

For my past home purchases, we've only used a buyer's agent. Any information you provide to your buying agent is always kept confidential and never provided to the seller (with a traditional agent, all your information must be provided to the seller). Your don't pay the buying agent anything extra other than splitting commissions paid from the seller's fees.

 

[Buckeye]

We've always used agents that end up getting paid from the seller's commission pot of money so I guess, technically, we couldn't call them a "buyer's agent."

They act in our interest during the search and the negotiations in that they don't get paid until we purchase a home but we are careful to not tell them anything that we wouldn't tell the seller's agent. Yes, there is some incentive to have you buy a more expensive home but it seems there is more incentive to get a deal done ASAP.

I think a true "buyer's agent" would receive their compensation directly from you.

 

[Katsmeow]

We've always used agents that end up getting paid from the seller's commission pot of money so I guess, technically, we couldn't call them a "buyer's agent."

They act in our interest during the search and the negotiations in that they don't get paid until we purchase a home but we are careful to not tell them anything that we wouldn't tell the seller's agent. Yes, there is some incentive to have you buy a more expensive home but it seems there is more incentive to get a deal done ASAP.

I think a true "buyer's agent" would receive their compensation directly from you.

Not really. If you sign a buyer's agreement with a buyer's agent the agreement in my experience provides that the agent will act in your interest but is compensated from the commission paid by the seller. The seller listing agreement typically gives permission for the commission to be shared with a buyer's agent.

 

[MBAustin]

Not really. If you sign a buyer's agreement with a buyer's agent the agreement in my experience provides that the agent will act in your interest but is compensated from the commission paid by the seller. The seller listing agreement typically gives permission for the commission to be shared with a buyer's agent.

This is correct. We used an "exclusive buyer's agent" for the two houses we bought in the last 14 years and were extremely pleased, but I'm sure part of that was that he is also an appraiser and has an excellent sense for the value of a property, regardless of current cosmetic issues. But there are not many exclusive buyer's agents out there.

Here's an article outlining the differences Buyer brokerage - Wikipedia, the free encyclopedia

 

[brewer12345]

We used and exclusive buyer broker (he did not take listings at all) on our latest purchase and it was invaluable. I was unfamiliar with the market and on a tight timeline. Our buyer broker was knowledgable and provided guidance without getting in the way of us making a decision. He was a former developer and contractor, so he knew what to look for. I would use him or another buyer broker again without a doubt.

 

[pb4uski]

brewer, did you pay him separately or was his comp a share of the listing agent's commission?

 

[brewer12345]

He got a cut of the listing agent's commission.

 

[savory]

In WI the buyers agent get paid by the seller. We just sold our house to people who had a buyer agent. We paid the commission.

As for those selling a house, we also listed by owner but with an agency that simply takes a flat fee. The fee changes depending on the amount of services. The key benefit using this service vs. FSBO is your home is placed in the multi-listing. You also get a few other pieces of support depending on how much you pay. We went with the $500 program for listing vs. the $250 or $1,000. That meant we showed the house and took the calls from perspective buyers, etc. This part was like selling FSBO.

The owner can also set the commission if their is a buyer agent. Since most people use the multi-listing, it seemed wise to offer realtors an incentive to show our house to their clients. Also, since buyer do not pay the commission, they are lazy and use a realtor. We offered a cash price (vs. percentage) for a buyer agent. In the end, our real estate fees were about 2.5%.

 

[Walt34]

If you don't know the market well, it would be to your benefit to sign up with a local agent who really knows the market. They may have local information on the listings that could give you an advantage. In theory the service is free since the seller's agent splits the commission. And, their job is to get you the best home for the lowest possible price, so they can help you with the negotiations, if you don't care to deal with that yourself.

+1

There are so many "gotchas" in RE that I wouldn't think of buying property without working with someone whose best interests are closely aligned with mine. And since those "gotchas" can change dramatically from state to state or even county to county within a state only the local agents and attorneys will know what to watch out for.

When I've had a buyer's agent it didn't cost anything extra - she was paid from the commission. But her obligation was to find a house that we wanted and would fit our needs.

The seller's agent is to sell a house. Whether it meets your needs is a secondary consideration. That said, of course the better ones do have some ethics and won't deliberately put you in an unsuitable house. But the seller's agent is under no obligation to tell you that a giant shopping center is scheduled to be built next to the back yard next year or that the seller will take $10k under the asking price. The buyer's agent is.

 

[SVHoper]

Hi,

I live in CA and used the random agent offered by the online Ziprealty twice and that worked out well through two competitive bidding processes.

I then changed areas and used another random agent (I just happened to be driving by their office) for the next two properties... even though my purchases ended up being well out of their normal area. I was very happy with the help they provided. In one case they identified another agent local to the area who helped with bidding, title issues during sale and quotations for renovation and in the other case they handled the fairly straightforward bidding process. I trust them to listen to what I say I want (and help me work out if it is really what I want) and I feel no pressure from them.

3% is certainly worth saving if you can get the sellers agent to act in your interest and give up 3%, but I found selling agents slow to return calls to me as a non-agent and since they are focused upon selling their listing, I think it is more difficult for them to give you an overview of the area and comparative value of properties. I like my current agent as they are very quick to respond and to prepare an offer, which I think is important in competitive bidding cases.

Your mileage may vary, but I will summarize to say that even with the wealth of online search and information, I think I have received substantial value from using an agent (3% paid by seller).

 

[MooreBonds]

There are so many "gotchas" in RE that I wouldn't think of buying property without working with someone whose best interests are closely aligned with mine. And since those "gotchas" can change dramatically from state to state or even county to county within a state only the local agents and attorneys will know what to watch out for.

While I agree that there can be some "gotchas" (especially for someone who is relocating to a different area, and/or a first-time homebuyer), I feel that (to a certain degree), the caliber of the 'average' real estate agent is something akin to the whole concept of an average "financial advisor" is with investments.

Sure, there are many (absolute numbers) of RE agents and financial advisors who would go out of their way to tell you everything possible, and are worth their weight in gold. But, based on my admittedly somewhat limited view and experience of RE agents, I get the feeling that the average RE agent isn't quite as high of a caliber in terms of knowledge and going out of their way to truly serve you, nor would I expect or trust them to be doing everything that you (Walt) envision them to be.

True, I'd say that the average RE agent is probably providing a 'better' service for you in absolute terms compared to the 'average' financial advisor selling 1.5%+ expense ratio mutual funds with loads....but for buying a home, I'd still be doing 90% of the work in searching for listings, looking for possible issues with the area or home, etc.. Not only because "there's no one else looking out for you more than you do" and only I know what I would consider a dream home vs a disaster vs something I'm willing to put elbow grease into, but also because if, say, something does come up a month or a year or a decade after you sink $350k into a home - what do you do? Sue over a $20,000 drop in property value? Complain that a $5k problem wasn't disclosed or your buyer's agent wasn't everything they were cracked up to be? It's more hassle to try to be compensated for things that you should rightly be compensated for, despite the fact that the agent should have said/done something (and even then, what is the cut-off on what the agent is 'obligated' to research or look into on a given property?)

 

[TimSF]

In California it is certainly possible to represent yourself when purchasing a home, but very difficult for most people, especially if it is your first time. Purchase transactions require complicated disclosure docs and an agent will help you understand them. If the market is competitive an agent is essential to help you understand how to present an offer and at what price, and help thru the negotiation process. I have used an agent for both of my purchase and for my money I would not go without one in this market.

 

[itsmyparty]

Just as an update....the realtor we contacted to look at the house we wanted to see and who advertised on Zillow as a buyers agent...did not give us any informative answer as to how her role is different from the sellers agent...when we met in front of the house we wanted to see Thankfully she did not Ask us to sign anything..we would not have. She did provide stats on the house...but we had seen them before on Zillow. Although she advertises on Zillow...she put it down as an info source...but I think its great to be able to see what houses are available and their interiors. Anyway we've now told her we are not interested at this time in moving...and she has never offered to give us an estimate of what our current house is worth although we said we'd want to sell if purchasing something new..but she keeps sending info.