How to Pick a Buyer's Agent
NEW YORK (BankingMyWay) — With the housing market picking up, more and more fence sitters will turn into shoppers. They face the question: Should I sign up a buyer’s agent or just go with agents representing the sellers?
In the old days – say, a decade ago – home shopping on your own was a hassle. While newspapers carried real estate listings, the information they provided was pretty skimpy. Rarely were there photographs, and certainly not the 20, 30 or 40 pictures you often see today on an online listing.
Today, you can click on an Internet listing, find out what school district the home is in, find it on a map, get an aerial view showing how close the neighbors are and key the address into Google Maps to find the nearest supermarket and check out the drive you’d have to work.
Back in the day, buyers counted on their real estate agents to figure all this out. Now you can do it yourself, winnow the list to hot prospects and call or email the seller’s agent to arrange a visit.
Yet the vast majority of buyers do use their own agents, often through a formal contract that obligates the buyer’s agent to put the buyer’s interests first. The seller’s agent has a legal obligation to promote the seller’s interests.
A key reason buyers’ agents are so common: In most cases the buyer’s agent is paid by the home’s seller, by splitting the 5% to 7% commission the seller pays the seller’s agent. If the buyer’s agent is free to the buyer, why not get one?
And a good buyer’s agent really can make the process easier, and perhaps save you money by carefully analyzing the pros and cons of each home. Good agents know the territory, can recommend appraisers and other professionals the buyer may need to hire and may well be more candid than the seller’s agent on the wiggle room in the seller’s asking price. The buyer’s agent also might know about unseen factors, such as plans to develop neighboring properties.
So how to you pick a buyer’s agent? Some agents work exclusively for buyers, and you’ll find them in the Yellow Pages or online. But most agents will wear either hat
That means you can shop around by calling the seller’s agents for properties that interest you. Once you’ve looked at six or eight homes represented by different agents, you should have a good pool to select from, as most agents will be eager to help you find another home if you don’t buy the one they showed at your first meeting.
What to look for? Diligence is probably the most important characteristic. A good agent who thinks you are a serious buyer will offer to show homes that might fit the bill and will keep in close contact as properties are added to the listings. A good agent will take your criteria seriously and not waste your time with listings that are too expensive or too far from your workplace.
Once you meet with the first group of agents, you’ll quickly find out which ones are eager enough for your business. But avoid the over-eager – anyone who pressures you to sign an exclusive contract before you are ready.
Ultimately, the agent who shows you the home you buy is entitled to a commission, so be ready to sign a contract eventually. As with all contracts, it’s important to study the terms.
While a seller’s agent may demand a contract for 90 or 180 days, a buyer’s agent should be willing to settle on a shorter term. And, while the seller’s agent will expect an exclusive right to list the property, you can insist that the contract with the buyer’s agent allow you to work with others.
The buyer’s agent should share the commission only if he or she finds you the home you buy, but not if you managed without the agent’s help. If someone else unearths the property, or you buy from a builder or developer, or from an owner selling without an agent, your buyer’s agent should not be entitled to a commission (unless, of course, you ask for some other type of help, such as guiding you through the appraisal, inspection, mortgage application or closing).
—For more ways to save, spend, invest and borrow, visit MainStreet.com.