What Most People Don't Know About a Buyer's Agent
Cost. Let’s cover the most important subject first-- what is it going to cost buyers to use a real estate agent? Many times when speaking with first time home buyers, most of them do not realize that buyer’s agents (real estate agents representing buyers) do not typically cost the buyers any additional money in most real estate transactions.
The way buyer’s agents are traditionally paid comes from the listing agent’s commission. Generally, the listing agent will charge a percentage when listing a property to sell and the buyer’s agent will take half of those proceeds at closing. However, there are situations where this is not the case. For example, there are certain agreements made between that buyer and agent noting that even if a property is not found after a given time, the client will pay the buyer agent some sort of commission for the time and work offered. Each contract is different and depends on the situation- however, a good agent explains this in great detail to each client.
Buyer’s Agents Do Not Work For Free
Although the above content suggests a buyer’s agent works for free, this should be qualified more in depth. When you ask a real estate agent to show you a property or start asking about programs and what is affordable for you, this is implying you will eventually utilize that agent to write an offer and represent you. If you are using the information and time of an agent and have no intention of using him/her, then you are taking full advantage of that agent. This happens more often than not, and that is why contracts exist. The most commonly used contract for this type of work is an Exclusive Buyer Broker Agreement. This specific contract turns a customer into a client in the state of SC. This allows the buyer’s agent to legally represent a buyer in a real estate transaction exclusively through writing offers and practicing fiduciary duties to that buyer. If buyers hesitate to sign that contract that should be an automatic red flag to an agent and all work should halt until that contract is signed-- this protects both parties involved.
So Why Not Use A Buyer’s Agent?
It often blows my mind when buyers in the market try to avoid using a buyer’s agent. Why you ask? Let’s think about it:
It does not cost you anything extra in the real estate transaction.
Your agent has access to the MLS and knows everything on the market in your most sought after areas and price range.
You have someone to represent you and explain every detail of the contracts throughout the entire process. This provides piece of mind that you are not being taken advantage of.
If you do not have trust in the agent representing you, you should never choose them to work with, however, at least find a licensed realtor you do trust! The most significant factor in business is to only work with people you trust completely. Take your time in choosing an agent, especially when it is dealing with the priciest purchase of your life! Hopefully this helps you if you are in the market to buy property.