How can I contract a buyer's agent so that his/her interests are in my interests as a potential home buyer?

Question

Traditionally, buyers' agents get paid a percent of the sale price of a home. Therefore, just like sellers' agents, they have intrinsic incentive to ensure a high sale price. Also just like sellers' agents, buyers' agents make more money the faster they sell homes (because then they can sell more homes & earn more commissions per any given unit of time). Since homes with many weaknesses don't sell as high or as fast as homes with fewer, buyers' agents (like sellers') have intrinsic incentive to withhold negative information about the homes they show to potential buyers. Real estate professionals promise to honor a "fiduciary duty" to their clients that requires them to put their clients' interests even above their own interests, but (call me a cynic!) I'll bet that in practice, a fair percentage of real estate professionals adhere to that pledge rather loosely at best. How can I retain a buyer's agent on an untraditional contract that aligns his/her interests with mine as a buyer?

Answer 1

#1 issue, I believe is compatibility. Ideally, it is not supposed to matter who pays the commission in a real estate transaction. However, I understand your concern. #2 You could develop an Exclusive Right to Buy With an Agent/Broker. In the contract developed between the two of you offer to pay X$ for the agent/broker service under XYZ terms.

I would not be concerned about a buyer agent witholding negative information. There are many homes available on the market. More important than a quick commission is a loyal client who will refer friends and acquaintances.

Commissions are negotiable. Email me privately for ideas.

Answer 2

Both the Buyers and Sellers agents fiduciary responsibility is to the seller, but not so they can get a higher commission. The Seller's agent is required to get the best price possible in the type of market that exists. Buyers agent has to bring in a qualified buyer so that the offer is legitimate. The 6% commission (3% buyers agent, 3% sellers agent) is actually given to the agents Brokers so that the Broker gets paid a certain amount, the agents fees to the office get paid next and then the agent gets paid.

What I suggest you do is to interview several agents. I don't mean have several agents taking you around to all the properties your interested in, I mean let them send you their listings by email, ask questions of them, ask about the certain neighborhoods, schools, etc and let them sell you on themselves. This will give you an agent who is willing to work with you and not against you. You will feel much better in the process, plus you will feel as if you have more control and things will run smoother for you.

Answer 3

First, maybe you weren't aware that there is a contract, called a Buyer Agency. Under this contract, you become a client and the agent and broker owe you a fiduciary duty - just as if you were a listing client.

When you are a client, you can ask for a market analysis of any home you're interested in, and I suggest you do it. If you don't know how to read one, ask the agent to go over it with you and explain. A top agent - either an old pro or a new agent striving to build a solid career - will be happy to help you so that you will be happy to refer him or her later.

Beyond that, do get references, and do interview the agent before you sign the contract. If they ask you to sign the contract before they'll show you a home - keep looking.

As you have noted, not all agents are honest or hard-working. (That's the old 80-20 rule at work once more.) I recommend seeing a home or two with an agent before you commit to them. See how much effort they're willing to put in.

One good clue is to see if they put you in their MLS system to get all new listings that fit your wants the day they're posted. It takes them only a few minutes, but lazy agents still won't do it. Of course, you need to know if that option is available in your locality, but the practice is now widespread.

Lastly, keep looking until you feel comfortable. If you go into a relationship with an attitude of "I don't trust you," you will not get good service and neither you nor the agent will be happy working together.

Answer 4

I don't know where you get this information. I have been a realtor for over 20 years. Yes, there are good ones and bad ones. I am retired now and have moved to a different state and can see that some realtors are so awfully unethical I can hardly even stand it. You need to find someone who you think is honest. Just because a realtor goes to classes and is a Certified Buyers Agent does not mean they are the right agent for you. Go to a large agency and interview some agents. Go out and look at a few homes with them and see how they react. If you don't like them go find someone else. Do not sign a buyers contract if you don't like them or they may be hard to get rid of. You can also contact the local real estate association and ask if charges have been filed against a certain realtor you are interested in hiring. This is not an easy process or a fast one, wish I could tell you it is, there are no sure fire answers for you. Best of luck.

Answer 5

First of all when you find a property the Seller has to sign a legal binding document which is called a sellers disclosure telling you everything about the house secondly i recmmend as your realestate agent would to get a home inspection as well as a termite inspection on the property if you live in an area where that would be needed this is going to tell you all you need to know about the structure as well as the condition of the home these are things a realtor does not see nor do you so it is a good idea to pay for these out of pocket so you know what you are up against lastly an appraisal is ordered on the property which is a interior and exterior inspection of the value if the property you are purchasing comes in under the contract price that you agreed on it is back to the drawing table where you and the seller can agree on the appraised value as what you are purchasing for or you have the option of paying the difference or backing out
The reason for these inspections is for you and your lender to make sure what you are getting is worth what your contract stated so regardless if there is a Buyers agent or listing agent or this is a for sale by owner you will know based on these inspections and appraisal if the property is worth what you planned on purchasing it for

Answer 6

I have worked in a real estate academy for just over 4 years now and have been actively practicing for just over a year. I can honestly tell you that no, not all agents follow their fiduciary responsibilities. The best way to find an agent that will take care of your needs over their own is to talk to more than one agent before signing a buyers agency agreement with anyone. If someone is pressuring you, that may not be who you are looking for. You want somebody educated to help you with most likely, the biggest purchase of your life. Keep in mind that the seasoned agents are not always the best choice. You may not want to work with somebody that you have to talk to their assistants assistant to do business. You want somebody with time for you. Another suggestion would be to talk to friends and family to see if they have anybody they reccomend. If they treated someone you know with honesty and respect, than chances are they will treat you the same way.

I read one of your responsis that somebody told you to not give an agent a try if they want you to sign the buyers agency agreement before they will show you a house. So far from wrong. The reason an agent does that is to protect themselves. If an agent spends all weekend showing you houses (with gas prices the way they are) and you go Monday to another agent and buy a house, that was a waist of that other agents time and money. We make commission only! We do not make a dime until we close on a house.

A big misconseption is people think we get crazy amounts of money when we sell a house. Not true! If a house is listed for $100,000 at 6%, that is $6,000. Then, we usually give 3% of that away to the agent bringing the buyer, so we are now down to $3,000. Then, we have to split that with the company we work for. Every company is different, in my company, we split it 40% to the company. Now, we just made $1,800. For a month of really hard work. So don't base picking an agent on whether or not they want you to sign a buyers agency agreement!! Also, it is illegal for us to write and offer without one.

Hope this helps.

Amanda

Answer 7

Ok...you have several facts in your above paragraph that are incorrect, but the simple answer to your question is....

1) Look on the MLS sheet so you can know what your Realtor's broker is making (probably 3% of the sale price). Your agent will make less than this because he/she has to pay some level of split with the broker and/or desk fees.

2) Don't work with an agent you do not trust, either as a listing agent or buyers agent.

3) Consider a Buyer's Agency Agreement....it may make you feel more comfortable.

Answer 8

A lot of your information is incorrect. Its all in the contract you sign. It doesn't matter whether you have a buy's or seller's, you are responsible for the contract you sign.

Always get a property/home inspection done before buying it. Realtors are realtors, not licensed inspectors and they aren't required to be. They may not know whether a property is a lemon or not ... they can suspect it, but some things are hidden until a professional finds them. Same as with cars. Some car salesmen know jack about mechanics beyond what they read in brochures.

Be very careful that you are not skirting, if not outright breaking, your state's contract laws when signing anything ... whether that is with a realtor or not. Sales can be nullified if the contract was not a legal one. And this can happen even after a house has gone through closure.

Answer 9

While in theory, your concerns hold muster, in the real life practice of Real Estate, this is nonsense. For the very small difference in commission that a few thousand or even tens of thousands would change, it just isn't worth putting your reputation out there for debate if you are in for the long haul.

I don't know what untraditional contract you are looking for or what the heck you would put in it. I wouldn't sign on for one, as when a buyer entrusts me to handle their transaction, that is what I do. You won't recommend me to friends and family if I didn't work to get you the best deal I can. That residual business means more to me than a couple hundred dollars of this transactions commission.

Think about it.

Answer 10

I have found that in my experiences in the business the best way to find a reputable Realtor or Lender is through a referral from a friend or family member that has had an outstanding experience with them.
Always and I mean always find a person that puts YOUR needs first.
Every business has bad people in them but when someone finds a really good person to deal with they will be more than happy to let you know about them.

Mark Marchand
Your Mortgage Consultant For Life