You’ve decided that now is the time. Your home search has begun. For the past few months, you’ve been noodling around on Zillow and Realtor.com and getting a sense of what’s out there. You are checking updates in your preferred neighborhood and price range. Last weekend you even went to a few open houses. This week you are heading to check out some model homes.
That open house you walked through the other day, that house that is sticking in your mind? The listing agent will likely offer to work with you to make the purchase. But they are working for the seller. They are not obligated to look out for your best interests. It’s not that they will treat you badly. They are by real estate law obligated to a few “Uniform Duties” that all agents must perform in their work, including Performing the terms of any written or oral agreement with Buyer; presenting all offers to and from Buyer in a timely manner regardless of whether Buyer is already a party to a contract to purchase the property; and disclosing to Buyer adverse material facts actually known by Broker;
Why do you Need a Buyer’s Agent?
What’s missing from this equation? ADVOCACY. This is where a Buyer’s Agent comes in. You’ve got questions: Should we focus on resale or new construction? Are the homes we’re looking at really worth the asking price? Are online estimates really accurate? What can we even afford? I keep hearing it’s a seller’s market – does that mean jumping at the first opportunity? We have a list of “must haves” – How should we prioritize?
You might wonder why you would sign some small pile of paperwork for a buyer’s agent. You are doing all this research on neighborhoods, homes, lenders, etc. But that’s just a part of the process. Gathering data is great – but a good agent will help you prioritize, offer advice based on experience in your market, and serve as your unswerving advocate throughout the process. Once an agreement is signed, they will make sure you understand your rights, guide the inspection process, help you order title, keep the loan process on track – all the crazy details that come with transferring ownership of land from seller to buyer. There is a LOT to keep track of!
Another side of this equation: a buyer’s agent has an obligation to keep your confidence. During negotiation on a property, you may say, “We really want to get this for $350,000 but we’re willing to go up to $362,000.” A buyer’s agent will help you negotiate without letting the seller know too much. In some markets and for some properties, your agent might advise going in a bit lower. For a popular property in a popular neighborhood, your agent might advise an “escalation clause” that gives you a leg up in the event of multiple offers on a given property.
Jennifer Boylan managing Broker here at Springs Homes has an excellent example of how a “Buyer’s Agent” armed with the right tools can be an invaluable asset.
Jennifer was working with a set of First Time Homebuyers. This couple was very savvy about what it took to buy a house. These buyers were referred to Jennifer by past clients, and they followed our home buying process to the letter.
The buyers understood that they were in a competitive neighborhood (Downtown Colorado Springs) and price range. When they found a home they fell in love with; they immediately moved to make an offer.
Knowing the market was hot and this home was most likely going to see multiple offers, the buyers decided to offer above asking price. Jennifer prepared a Market Analysis, which showed the home was already priced at the top of the market. Additionally, the home was older and was going to require some repairs.
Jennifer advised them to go in at full price with an escalation clause. The clause said the buyers would pay $1,000 over the highest offer the seller received (we’d, of course, have to see the offer). This made the buyers nervous because they had heard stories of bidding wars driving prices up tens of thousands of dollars. Jennifer assured them that the clause was simply to keep them in the running for the home and reminded them that if the price got out of their comfort zone, the Colorado Contract offered some important contingencies they could take advantage of in order to get out of the contract.
The buyers ultimately got the home at asking price. It seems like the other buyers feared the bidding war as well. The sellers ended up doing a good deal of repairs after the inspection as well. This also saved the young buyers several thousand dollars after moving in.
The combination of knowledge on pricing, contract contingencies, and inspection issues helped save these buyers a large sum of money. A Transaction Broker or Non-Buyers Agent could not have done this. They would have been obliged to counsel the buyer to seek professional advice. The Transaction Broker simply takes directions, they cannot be a true advocate.
What to Look for in a Buyer Agent
So as you enter the fray of the home search process, one of the first steps is to interview for a good buyers’ agent. Some things to look for:
- A balance of experience and energy. Don’t discount a newer agent who is eager to serve you. A newer agent with great training can be a real asset. And an experienced agent who knows the market and remains engaged – great choice! What you DON’T want is a newer agent who doesn’t know what they don’t know, or an experienced but “adios” agent who is burned out and doesn’t seem to have time to engage in helping you find the home of your dreams.
- Transaction know-how. Ask prospective agents about their most challenging transaction and how they handled it. Sometimes sellers can gum up the works with unreasonable demands, and homes are not always what they appear to be on your first walk-through. Knowing how your agent handles adversity can help you make the right choice.
- Advocacy, advocacy, advocacy. At the end of the day, this is what you are looking for. Someone to look out for your interests, educate you about the process, and advise and guide you through a process that probably involves the largest purchase you are going to make in the foreseeable future.
If you think working with a “Buyer’s Agent sounds like a good idea, we know a great place to start. Take a look at the Agents here at Springs Homes. We are proud of the work these people do and their reviews and testimonials prove it.
Additional Resources: These are 3 additional articles I felt did a great job of conveying the concept of Buyer’s Agency, hope you enjoy them.
- Conor MacEvilly at MySeattleHomeSearch.com wrote a great article that illustrates the kinds of questions a good Buyer’s Agent would ask. This article looks at purchasing a Condo but certainly helps you see how a good agent thinks.9 Critical Questions To Ask When Buying A Condo
- Michelle Gibson at The Wellington Home Team in Wellington Florida shares “9 Shocking Facts Home Buyers Don’t Know”This is another look into the types of issues a good Buyer’s Agent will have a strong working knowledge of.
- And Finally, Dan Barcelon from Evergreen Properties & Investments explains Why Should I Hire a Realtor to Buy a Home? (hint: it’s all about buyer agency)