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#370180 - 03/18/11 10:06 PM My relationship with buyer's representative
timothy1 Offline
Member

Registered: 03/18/11
Posts: 20
Loc: California
I'm a soon-to-be first time home buyer with a question about my relationship to a buyer's rep.

On one hand, I think a newbie like me could get in serious trouble by not using a professional to craft an offering price and contingencies, handle liaisons with the attorney and escrow agent, and hold my hand up to the closing. I'd never attempt it on my own.

On the other hand, there's an awful lot I can do myself. I can browse MLS listings at realtor.com, call up the agent who's brokering the listing, and make appointments to see the home myself. (Or that's what I assume, anyway.) Sure, I'll want my buyer's rep to take a look at any home I'm serious about, but she or he doesn't have to go see every one.

To me, it makes the most sense to pay the buyer's rep by the hour ... but I don't want to press for that arrangement if it's unusual, and would put the rep in a difficult spot.

In all the reading I've done online, I'm still not sure of how much a buyer's rep is generally paid, and who pays her or his fee -- the buyer and the seller.

Any insight will be appreciated. I've found plenty of answers in what I've read online, but a lot I'm still mystified about.

(I should mention: I won't need a mortgage, and intend to pay cash for whatever I get.)


Edited by timothy1 (03/18/11 10:34 PM)

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#370198 - 03/19/11 08:01 AM Re: My relationship with buyer's representative [Re: timothy1]
Bigtoe Offline
Major Contributor

Registered: 10/14/07
Posts: 2238
Loc: Outer Banks
Typically, the buyer's agent splits the commission the seller pays the listing agent. So, a buyer does not necessarily have to pay.

If you look at a house with the listing agent first then the listing agent might not split the commission with the buyer's agent. In this scenario you would be paying your agent while the listing agent keeps the whole commission.

Your best bet is to find a good buyers agent and have them help you find the house. If you bring them in on just the house you pick then they won't be able to help you compare the other houses to this one.

Your buyer's agent can get paid from the split commission offered in the MLS. If the commission offered in the MLS is too low or non existent then you just skip that house because the seller has already showed how they are not serious/realistic about selling.

There is no need to reinvent the wheel.

ps. Do not sign an exclusive buyer agency agreement until you have worked with the agent for a while to be sure you are not committing yourself to the wrong agent. They will say it is the law but they can have you sign a non exclusive buyer agency agreement which covers their requirement and does not force you to work with a slacker.
_________________________
Your Outer Banks real estate agent. Helping people buy and sell OBX real estate since 1989.

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#370207 - 03/19/11 09:09 AM Re: My relationship with buyer's representative [Re: timothy1]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7720
Loc: Vermont's North-East Kingdom
Originally Posted By: timothy1
(I should mention: I won't need a mortgage, and intend to pay cash for whatever I get.)

Hearing that, I'd be glad to represent you if you want to make a purchase in Vermont !
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#370377 - 03/21/11 04:14 PM Re: My relationship with buyer's representative [Re: Bigtoe]
timothy1 Offline
Member

Registered: 03/18/11
Posts: 20
Loc: California
Thanks for the feedback, Bigtoe and Vermont. It sounds like this is something to discuss with the would-be buyer's rep, once I'm ready to start working the phones.

I appreciate the tip about avoiding an exclusive buyer agreement.

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#370880 - 03/27/11 06:29 PM Re: My relationship with buyer's representative [Re: timothy1]
BK Estates Offline
Member

Registered: 07/25/10
Posts: 257
Loc: SoCal
A lot of the listings on Realtor.com are dated, and not available. You will need a better source to find available homes for sale. You can't just call the seller and make an appointment to see the house. Those arrangements are made through agents. In most circumstances, you don't pay the buyer's agent, they are paid by the seller. So you really don't have anything to lose by using a buyer's agent. I think it is better for the buyer to have his own agent, rather than going through the listing agent. The buyer's agent will look out for your interests.

There are good arguments to be made on both sides of whether or not to use a buyer's representation agreement. In the end, they don't hold much water. I know a lot of agents that use a loyalty agreement instead. The main reason for it is just so the buyer knows he is expected to buy from the agent that is working for him, and not just use the agent sitting at the open house he visited. Buyer's agents work very hard, and they deserve to be paid for their work.

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#371279 - 03/31/11 02:54 PM Re: My relationship with buyer's representative [Re: BK Estates]
Devil's Advocate Offline
Veteran Member

Registered: 01/03/05
Posts: 538
Loc: Ontario, Canada
You may also wish to consider:
whether you want to be an agents customer or their client as there is a distinct legal difference, as an agent owes fiduciary duties to their clients, but not to customers.

Locally, where the law of agency prevails, the Buyer Representation Agreement (exclusive contract) when executed establishes a fiduciary relationship between the agent and the client, and without an agreement in place it may be difficult to establish a fiduciary relationship ever existed.

The law of agency imposes fiduciary duties upon the agent, of which there are a number of them, one being that they are required (by law) to act in the best interest of their client and to put the clientís interest above all other interests, including their own.

Where there is a breach or an anticipatory breach of the agentís fiduciary duty, the Buyer Representation Agreement may be terminated by the client without notice.

Agents may also be held liable by their clients for any acts and/or omissions that were detrimental to their clients.

There are benefits, in a client knowing their rights and entitlements as a client, as well as knowing the full extent of the agentís duty and obligations owed to them as clients.


IMPORTANT NOTICE: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a Lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.

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#372847 - 04/15/11 08:09 PM Re: My relationship with buyer's representative [Re: timothy1]
Zach Sikes Offline
Member

Registered: 04/11/11
Posts: 40
Loc: Edmond, OK
If you are going to look at multiple houses, use a buyer's rep. With gas prices so high, a good idea is to interview different agents until you find one that you like, and stick to that person. After that, it is ok to sign an agreement.

One of the problems buyer's agents run into is showing many homes to a prospective buyer, then the buyer seeing another house and calling the listing Realtor. The buyer then makes an offer on the house, and the buyer's rep ended up wasting his time and gas money with the buyer. This is why many buyer's reps want you to sign an exclusive agreement. Most will actually work harder for you once you do sign.
_________________________
Check out Homes for Sale in Edmond and OKC

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