Why Do I Need a Buyer's Agent at All?
March 20, 2015
Steve Carpenter Israel, President and Broker with Buyer's Edge Company, Inc.
Potential clients come to Buyer’s Edge all the time that are trying to determine if they need to use a real estate agent when they want to buy a home in Washington, DC, Maryland or Virginia. These are often tech-savvy homebuyers who are heading out on Sundays and are going to open houses without buyer representation. They may feel more comfortable searching the newspaper the “old school way” or using modern technology to determine which homes are open each weekend. These kinds of buyers are confident that they will be able to negotiate a strong deal with the listing agent if they decide to buy a home that they have seen at an open house.
However, there may be a number of pitfalls if homebuyers decide to take this approach. The main one being that the listing agent and the real estate brokerage firm that they work for already have a signed agreement with the seller to get the highest price and best terms for the homeowner. Working with the listing agent or another “designated buyer’s agent” in the same company can work for homebuyers, especially if they understand the complicated buying process and are hard-nosed negotiators.
Many homebuyers like to go it alone so they can control their own destiny. With all the technology available to online, most buyers start their home/condo search on the Internet way before they ever speak to a buyer’s agent. Finding a property doesn’t seem that hard or complicated to them, but determining if it’s a good value takes experience, in-depth research, up-to-date data and a lot of homework. Buyers need to get the answers to what other properties have recently sold for in the neighborhood and understand what’s the true condition of the property. Listing agents and “designated buyer’s agents” can’t help buyers perform in-depth property analysis and how it affects property value and contract bid strategies. Obviously, this isn’t in the best interest of the seller.
However, all exclusive buyer’s agents (EBA) working for buyer brokerage companies that never take listings can protect, educate and negotiate in a buyer’s best interest. EBA’s will provide comparable sales in neighborhoods and help buyers absorb all the idiosyncrasies that come into play during the home buying process. They’re not hesitant to discuss environmental concerns like lead paint, radon, mold, asbestos and buried oil tanks. Evaluating properties correctly, including all of the property condition issues is the main goal before putting on the negotiators hat. EBAs also take their time when discussing and strategizing the pros and cons of each paragraph in the buyer’s contract that can be over 54 pages long after all the disclosure statements have been added.
With pages and pages of real estate lingo in a contract, homebuyers need to remember that the all real estate agents working for the listing brokerage company have a fiduciary responsibility to their sellers. Dual agents and “designated buyer’s agents” in the same large, traditional real estate company make both the buyer and seller put in writing that they agree to give up their right to “undivided loyalty.” Once buyers and sellers have signed this agreement, “designated buyer’s agents “ now can advance interests adverse to yours. Though they aren’t allowed to reveal your confidential information, they also may not use any information that you may give him that would advance your interests. If for no other reason, this is why homebuyers may want to forego the “my true destiny path” and work with an exclusive buyers agent that truly represents your best interest from the start of the home buying dance to the end of this extraordinary experience.