What Is a Buyer's Broker?
What is a Buyer's Broker? (top of page)
A Buyer's Broker represents the home buyer's best interests and negotiates on the home buyer's behalf. The Buyer's Broker can give the home buyer information about a home, area, prices, etc. that a seller's agent, by law, cannot.
When you, the buyer, call a real estate agent (listing or seller's agent) or the agent's company (seller's broker) off a sign in the yard or an advertisement in a homes magazine, newspaper, tv etc. or attend an open house or work with an agent who or whose company, has the property listed... that agent and that company are working for the seller!! The listing agent and the company are bound, by law, to get the seller the best possible price and terms and not to divulge any information to you, the buyer, that is contrary to the seller's best interest.
(Employers say hiring Buyer's Broker is good business. - CHICAGO SUN-TIMES)
(A real estate broker doesn't work for you, but for the seller. If you want someone on your side, get a Buyer's Broker. - READER'S DIGEST)
No doubt, you have seen numerous articles in magazines, financial publications, and news programs such as ABC News "20/20" stressing the importance of using a "Buyer's Broker".
Who needs a Buyer's Broker? (top of page)
Anyone buying a home who wants a Realtor on their side and representing them, not the seller.... especially people new to an area and first-time home buyers. A seller's broker (listing company) CANNOT, legally or ethically, represent a home buyer's best interests or negotiate for a lower price or better terms.
(Hire a Buyer's Broker. When in the Market for a home, the best defense is a strong offense. Using a Buyer's Broker should save money. - WORTH MAGAZINE)
(A Buyer's Broker can provide information that an agent for the seller can't. - THE AUGUSTA CHRONICLE)
(You'll get the surest representation from a single-agency Broker or an Exclusive Buyer's Broker. - KIPLINGER'S PERSONAL FINANCE MAGAZINE)
Where can I find a Buyer's Broker? (top of page)
Your best bet is with a company who has very few or no homes listed and the broker agrees to work for you, the buyer. You are less likely to be in a "Dual Agency" situation or not have any representation at all.
Does it Cost Any More to Use a Buyer's Broker? (top of page)
No. One great part about using a Buyer's Broker is that it doesn't cost you any more. In fact, it will probably save you money AND you have a REALTOR on your side... representing your best interests.
(Buyers average a 5% savings when represented by a Buyer's Broker, rather than a sales agent - MONEY MAGAZINE)
(Hire a Buyer's Broker. When in the market for a home, the best defense is a strong offense. Using a Buyer's Broker should save money. When U.S. Sprint recently surveyed transferred employees who used Buyer's Brokers, the telephone company discovered they paid, on average, 5.5% less than the local average for comparable homes. - WORTH MAGAZINE)
Who pays the Buyer's Broker's fee? (top of page)
The seller. You get the best of both worlds: You, the buyer, are getting the representation and the seller is paying the commission.
(Get a Broker on your side. Using a Buyer's Broker, who has your best interests in mind, may help you shave thousands off a home's purchase price, mortgage or various other costs, and there is no fee to the consumer. - WOMAN'S DAY)
Are all Buyer Brokers the same? (top of page)
NO. Some companies assign one agent to work for the buyer (buyer agent) and another agent to work for the seller (seller agent). Both of these agents work for the same company. Can you imagine what is going on behind the scene when you think one of the agents is working "exclusively" for you. They're hoping that you don't care or understand. How can the agents be objective on properties listed by other companies when they make more money by selling you one of their own company's listings and the company's loyalty is to the seller?
Another ploy is to get you, the buyer, to sign a Buyer Brokerage Agreement with a "disclosed dual agency " clause. Make absolutely sure the agent will be working for you "exclusively".
Won't I get a better deal if I buy directly from the listing agent? (top of page)
NO. The listing agent (and company) owes his or her loyalty to the seller and cannot legally help you get a better deal. Some buyers believe that the listing agent should be willing to take a lower commission because he or she does not have to share with another agent. The "bread and butter" of most companies is to sell you one of their listings and make both sides of the commission. However, any commission savings may be very small compared to buying an over-priced home, buying in the wrong area, buying the wrong home, etc. REMEMBER: The seller's agent (and their company) is working for the seller and CANNOT, legally or ethically, give you, the buyer, any information contrary to the seller's best interest.
I have friends who are agents in the real estate business, couldn't I use one of them? (top of page)
You can. However, if the home is listed by that agent or the company the agent works for, that agent and company are, by Georgia law, representing the seller. The agent can work as a "dual agent", however, neither the seller nor the buyer are really represented.
What does consumer advocate Ralph Nader say about a Buyer's Broker? (top of page)
Consumer advocates Ralph Nader and Stephen Brobeck mounted blistering attacks on the real estate profession at a two-day conference held earlier this month in Cambridge, Ma. Reform has never been possible before, according to Ralph Nader, because no group has had the power to oppose organized real estate or a vested interest in coming out on the side of the home buyer. "That's why," he declared, "I think the rise of the buyer brokerage movement will become the most significant single factor in crumbling the tight-knit real estate cartel". However, it was the practice of "disclosed dual agency" which came in for the severest criticism. Dismissing it as "A maneuver for the big guys to have it both ways," and "shaft the consumer," Nader urged Buyer Brokers to make "the struggle against disclosed dual agency their number one priority." - REAL ESTATE INSIDER
If I go to a sales agent's office for help in finding a home, doesn't that agent consider me a client? (top of page)
No. And this is where a lot of buyers are mistaken in assuming the sales agent will automatically be their agent. Just because a salesperson shows you several properties, and even helps you write up and transmit an offer, does not mean the salesperson is your agent. If the agent is not contractually working for you as a Buyer's Broker, the agent is working for the seller.
(Buyer's Agents can, however, be hard to find. For instance, if you walk into a real estate office and say, "I want a real estate agent on my side," and some agent gives you a big smile and says, "I'll guarantee that I'll be fair and honest with you," you have NOT found a Buyer's Broker. - THE ATLANTA JOURNAL AND CONSTITUTION)
What is a seller's (or traditional) agent? (top of page)
The seller's (or traditional) agent is working for the seller. Their duty is to get the seller the best possible price and terms and not divulge any information to you, the buyer, that would be contrary to the seller's best interest. This agent cannot legally negotiate on the buyer's behalf.
(As more buyers realize that traditional agents don't represent them, they've begun enlisting agents that do. Buyer's Brokers are bound by contract to find a home and negotiate the lowest price and best terms for the buyer. - CHANGING TIMES - KIPLINGER'S PERSONAL FINANCE MAGAZINE)
What is single agency? (top of page)
In single agency, either the buyer or the seller is represented but never both in the same transaction.
What is dual agency? (top of page)
Dual Agent - This agent tries to play both sides of the fence. Probably works for a company that lists many properties. This agent tries to represent the buyer and seller in the same transaction on properties listed by them or their company. Neither the buyer nor seller are truly represented. This is known as "dual agency". Dual agency without disclosure is considered fraud. There is a conflict of interest between trying to sell you one of their company's listings and showing you other properties on the market. Why? Because, if the agent sells you a property listed by them or their company, the agent and the company make more money. Needless to say, if you work with an agent with a company which has many properties listed, you, the buyer, are excluded from being truly represented on those properties. A good example of "dual agency" is like one attorney trying to represent both the plaintiff and defendant in the same case. This lies somewhere between near impossible and impossible.
(It was the practice of "disclosed dual agency" which came in for the severest criticism. Dismissing it as "A maneuver for the big guys to have it both ways," and "shaft the consumer," consumer advocate Ralph Nader urged Buyer Brokers to make "the struggle against disclosed dual agency their number one priority." - REAL ESTATE INSIDER)
(Law firms wouldn't represent different parties in the same financial transaction because the conflicts of interest between the buyer (who seeks the lowest price possible) and the seller (who seeks the highest price possible) are so fundamentally incompatible as to make it impossible to represent both sides fairly.- CONSUMERS' RESEARCH)
(One thing to watch out for is whether your so-called Buyer's Agent shows you his or her listings or even other agents' listings from the same company, a tip off that your interests aren't being represented. - SMART MONEY- THE WALL STREET JOURNAL MAGAZINE OF PERSONAL BUSINESS)
("I've seen a lot of fake buyers' agents, who think there's no more to being one than filling in a line on a disclosure form," said Propp. "They don't realize the difference between agency and agency disclosure". "There's a lot of confusion among people (agents) who are using the name (buyer's agent) almost as a protection." - REAL ESTATE TODAY)
Will a Buyer's Broker be more objective? (top of page)
You be the judge. Take new homes for instance. The real estate company, who has developed the subdivision and have the homes listed, is working for the builders. Naturally, the listing company makes more money by selling a home in their subdivision but, also, the agents with the listing company know that if they sell a home by one of their builders, that builder will build another home and list it with the agent who sold the last home. You, the buyer, are only one transaction whereas the transactions with the builder will amount to several. Who do you think the agent will look out for? The Buyer's Broker is not in a situation like this because the Buyer's Broker does not owe any allegiance to any particular home, builder, area, or subdivision.
(The surge of interest in Buyer's Brokers results in part from a campaign by officials in some states, to insure that buyers more clearly understand that a traditional (seller's) broker does not represent their interests, even though it may often appear that way. - THE NEW YORK TIMES)
Will my search for a home be less stressful? (top of page)
Yes. A Buyer's Broker spends 90% of the time counseling and 10% selling whereas a traditional agent spends 90% of the time trying to sell you something (probably a home listed by them or their company) and 10% counseling. This makes the whole home buying experience less stressful and intimidating.
(Many house hunters are more at ease knowing their interests come first. - THE STAR TRIBUNE)
Will a Buyer's Broker show me more homes than a seller's (or traditional) agent? (top of page)
Most likely, yes. The Buyer's Broker will show you properties listed with the Multiple Listing Service, foreclosed and probate properties, and yes, even For Sale By Owners. Under seller agency conditions, buyers are usually only shown listed properties.
(A Buyer's Broker can also show "for sale by owner" homes and even chase after homes that are not openly for sale. By contrast, seller's brokers will normally limit to their own listings plus properties listed with neighboring brokers. - THE NEW YORK TIMES)
Does the corporate relocation industry use Buyer's Brokers? (top of page)
Yes. However, some employers still use relocation companies who refer employees to large real estate companies that list properties and on those properties, the buyer has no representation.
(The corporate relocation industry - feeling victimized by subagents who allowed transferees to pay too much for ultimately unsuitable homes - are turning to buyer representatives for more and more of their business - REAL ESTATE LAW QUARTERLY)
PHILIP BLACK REALTY
P.O. Box 211261
Augusta, GA 30917-1261
Phone: (706) 855-8003
Fax: (706) 860-0849
Copyright © 1996-2007 Philip Black Realty
Augusta GA, Augusta Georgia, Augusta real estate homes Buyer's Brokers, Agents representing home buyers and sellers in ( Richmond County ) West Augusta and ( Columbia County ) Martinez, Evans, Grovetown and surrounding areas.