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Let’s face it; the residential home buying business is a confusing one for the consumer. Most home buyers start at their computer and look at photos of homes, reading the glowing descriptions and they know, deep down, that they shouldn’t be buying into the hype, but it is oooohh so tempting. There is that perfect 3 bedroom with the new kitchen at just the right price. And there is a phone number to call.
Did you know you are choosing an agent?
Call that number and you have selected :
Door number 1: The Listing Agent or Their Co-Worker
Just a heads up, that agent has an agreement with the seller requiring him or her to do the very best they can to get the best deal for them (not you). But in most cases, that agreement says that if the agent also brings YOU, the buyer, they get paid twice as much.
But let’s say you have read somewhere that you do not want that listing agent, so when you call the number on the sign or the website, you say, “I want to choose my own agent”. Will they do that for you? OF COURSE. The company still gets the full commission and they will refer you to a person in the office to be your agent. Might be the junior person where they get a bigger percentage of her take or it might be whoever is “on the desk” that day. Now that person will be your agent to negotiate against the listing agent, who may well be a big producer in that office with a lot of clout and experience. They might even share an office space or an assistant.
Gee, I wonder if that might have an impact on the deal you are able to strike?
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So maybe you decide that’s not for you, and you start the home buying process by researching AGENTS rather than houses, and looking for agents that have a reputation for doing a good job for buyers.
Smart move!
You have selected:
Door number 2: Your Own Agent
Excellent choice. Now you get an obligation to treat you with a fiduciary duty—the highest standard—as if they were buying for themselves. In most cases, you are not obligated to pay the agent anything—the commission is built into the price already and is the same one that listing agent was going to take home as an extra bonus if you used him or her. Expect this agent to make you feel like they care about the result, not just their commission.
BUT WAIT, is there yet another way?
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So what is the extra half step you can take to select an agent to help you buy a home? It is when you select a buyer’s agent who ONLY REPRESENTS BUYERS, called an Exclusive Buyers Agent.
BINGO: You have selected Door number 2 ½: An Exclusive Buyer’s Agent
This is a special type of buyer’s agent. One whose colors don’t change with the wind—a listing agent one day and a buyer’s agent the next. An agent who does not work in the same office with any listing agents. This agent ONLY REPRESENTS BUYERS. How weird is that? They give up all that commission potential? Why? Because they have made a business decision to focus on all the nuances of buyer representation. The lender quagmire, builder reputations, inspectors with no training, contract pitfalls, school rankings, etc. etc. etc. They should ferret out all the good houses, advise you on the best ways to make offers, inspect the home critically and be tenacious in getting you the right contract terms. Are they guaranteed to be the best? Of course not, but you have a greater chance of getting a good agent if you interview at least one of these to see the difference. There aren’t many!
Contact Sage, The Main Line's Exclusive Buyers Agency.
PAR, Pennsylvania Association of Realtors, has seen a net loss of approximately 2,700 members since 2009, with membership numbers currently at 28,000. The association’s leadership team initiated a survey to determine why. “The survey confirmed what we suspected,” said PAR President Guy A. Matteo, GRI, SRES. “The challenging market conditions were a contributing factor to why members left the industry in the last two years."
Fewer agents are having a success in the tough residential real estate market, but the continued success of Sage demonstrates that a winning concept can work, even in tough times.
"It is your responsibility to search for an agent who will represent your interests in the real estate transaction. If you want someone to represent only your interests, consider hiring an 'exclusive buyer's agent', who will be working for you."
U.S. Dept. of Housing & Urban Development Home Loan Booklet
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