Buyer Representation is fairly common in other parts of the country and now is being seen a lot more in New York.
So what is Buyer Representation? Let me give you an example. Say you’re going through a contested divorce. It would be very unlikely that you would go through the proceedings without an attorney or, worst yet, follow the advice of your spouse’s attorney. Then why would you buy a home, which is essentially an adversarial process regardless of how pleasant the seller seems to be, without someone on your side?
You think you already have buyer representation? Think again. If you have not had a discussion with your agent regarding who he or she is representing, there is a good chance they are representing the seller’s best interest.
Most lawsuits in real estate happen when one side is under-represented and, in most cases, buyers do not know that “their agent” is representing the seller. In 1983, the Federal Trade Commission found that 72 percent of all buyers believed the agent they worked with was representing their interests. That meant that three out of four buyers were basically spilling their guts to agents who weren’t representing them. The report led to the disclosure laws we have today which require the broker or licensee to disclose who he or she represents in every situation.
Recently, more home buyers have been asking, “Who represents whom?” As a result, many are opting to be represented by a buyer’s agent to take them through the process, from sitting down for a buyer’s consultation to closing. A survey conducted in 2001 found 46 percent of home buyers used buyer representation.
The greatest thing about this is it doesn’t cost the buyer anything and often saves them thousands during negotiations.
So, what can you expect with Buyer’s Representation?
– Assistance in determining the amount that you can afford and connect you with a qualified lender to get you pre-approved for a mortgage.
– Evaluation of your specific needs and wants.
– Provision of local school data and neighborhood information.
– Research regarding selected properties to identify any problems and help you with any concerns you have.
– Advice on structuring an appropriate offer to purchase and, when possible, your agent will sit down with the seller, present your offer and negotiate on your behalf.
– Most importantly, fully-represent you, the buyer, throughout the real estate transaction.
So if hiring a buyer’s agent is of no cost to the buyer, who pays the buyer agent’s commission? Most sellers agree to allow the listing agent to split the commission with the buyer’s agent, which means the seller is paying the buyer’s agent to represent the buyer against the seller. While many people think that whoever is paying the lawyer or agent is the one getting the best representation, courts have made it clear that representation has nothing to do with commission.
Why would a seller agree to allow half of the commission to go to a buyer’s agent who is representing a buyer against the seller? Simple — the seller wants to sell. And when it comes down to it, the transaction really funds the commission.
Remember, hiring a buyer’s agent is of no cost to you and it is your right to be represented.
To learn more about buyer representation and to schedule a free consultation, call Karen at 917-981-1877.