In today’s market where home searches are easier than ever for home buyers, it’s understandable why more buyers begin the house hunting process on their own.
And, we have all seen the house hunting shows on television portraying the Buyers Agent’s as a glorified home “shower”, it makes sense buyers get the idea that is all we do.
Then there is the dreaded subject of commission nobody wants to talk about and who exactly pays.
Let’s start by addressing exactly what a Buyer’s Agent actually is.
What is a Buyers Agent?
A Buyers Agent is a real estate professional that is licensed to represent buyers and their interests in real estate transactions from the first contact through closing and beyond. A Buyers Agent has YOUR best interests in mind and helps make sure you are protected in a real estate contract AND that you get the very best deal possible.
What is a Sellers Agent or Listing Agent?
Whereas a Buyers Agent represents the buyers best interests and negotiates the best deal possible for their buyer, the Sellers Agent or Listing Agent does the exact same thing except they do this for the Seller. They represent the Seller and their best interests and negotiate the best deal possible for their Seller. Bottom line: The next time you think of picking up the phone to schedule a showing with the Listing Agent or just call to ask questions because you believe it is easier or you will get a better deal by working directly with them, think again. Even calling with questions can get you into a sticky situation of representation when you later have your Buyers Agent trying to submit your offer.
The Truth About Commission and Splits
It is important to understand that commission is decided at the time the Seller signs the listing agreement with their Sellers Agent and gives them permission to sell their home and represent their best interests. Commission is figured into the price of the home when it is listed. It is also important to understand commission splits between Buyers Agents and Seller’s Agents and their representative Brokerage Companies is again decided at the time the contract is signed. The split is usually half, although that is not a set rule. That means when the home closes, the Buyers Agent gets their portion of the commission for representing the Buyer and the Sellers Agent gets theirs for representing the Seller.
(Agents work for real estate brokerage companies and must adhere to their policies, rules, and commission splits. The commission is actually given to the brokerage who takes their part and then gives the agent who works for them their percentage split as agreed upon in their employment contract.)
What Does a Buyers Agent Do?
When it comes time to get serious about looking at potential homes to purchase, a Buyers Agent will want to discuss what is most important to you in finding your perfect home.
- Customized Home Search and Must-Haves
Buyers Agents will set you up on customized home searches that fit the parameters of homes you are most interested in. It’s important to let us know exactly what you are looking for and include your wants, needs, desires, and must-haves so we can help you narrow down your search with the homes available on the market and be ready to act immediately when you find a home you absolutely love! During this time, it is imperative we communicate with our buyers and get feedback so we can suggest homes we believe you will love as well as constantly checking the market for new homes as they hit the market.
- Working With the Lender
As Buyers Agents we work with many lenders and it is our job to put you in touch with a trusted lender BEFORE you are ready to begin looking at homes. Your lender will ask for documents to pre-approve or pre-qualify you for a loan and help you understand exactly what your home purchasing power is. It is extremely important this is completed ahead of time as most sellers require a pre-qualification letter from your lender when an offer to purchase is made. We work with your lender through the entire process to ensure all deadlines are met and the process to closing is simple. And don’t worry about privacy of your finances, your lender only shares with us what is necessary to your home purchase as it pertains to your contract for purchase.
- Viewing Homes
Now it is time to start the fun part…scheduling showings for your potential new home! We will schedule a time to discuss all the homes that fit your parameters and decide which ones you are interested in viewing. As your Buyers Agent, it’s important during this phase to let us know what you like and dislike in different homes as this helps us hone-in on exactly what you want. Perhaps you need an extra-large dining room for your 12-seat dining room table or maybe you don’t want a dining room at all. These bits of information will help us to narrow your search even more when scheduling showings.
- During and After Viewings
We will be asking many questions during and after viewing the homes we have chosen to see. What we want is your honest opinion of how interested you are in each home; what you liked and didn’t like and if any of the homes could potentially be your new home. Again, all the information we gain helps us even more to help you find exactly what you are looking for. If we didn’t find the perfect home no problem, we keep looking. However, now we have an even better idea of what you want and will continuously check the market for new home listings to see if those homes might work.
- Market Experts
It is our job to know and understand our local real estate market and we take this very seriously in order help you to the best of our ability. We keep on top of what is selling AND what homes have sold for in order to help you make the best offer for purchase. In addition, we gather all necessary documentation and information such as the Seller’s Property Disclosure when you are contemplating an offer so we can do an accurate comparative market analysis of the home compared to others with the same parameters.
- Making the Offer and Counter-Offer
After giving you all the information to make an informed decision, it is time to write up the offer for purchase. We will discuss the offer, escrow money, inspection period and contingencies, financing contingencies, appraisal contingencies and date of closing. Once the offer is written according to your wishes, we will have you sign it and send to the Sellers Agent along with your pre-qualification letter. Sometimes your offer will be completely rejected. Other times your offer will be met with a counter-offer. Whatever the case, we discuss all the options you feel comfortable doing moving forward. Sometimes unfortunately the best action is to move on to the next home because there can be no meeting-of-the-minds.
Once your offer is accepted, it is time to set up the inspection. We always refer our buyers to a home inspector we trust unless you have someone you want to use. We help set the appointment, go to the inspection, review the report with the inspector and you and then make some decisions. We will be especially interested in items of the report that affect insurance and safety of the home first and will discuss this with you. It is our job to negotiate with the Sellers Agent on your behalf. If for whatever reason during the inspection period you decide not to move forward, you have that right to completely walk away from the offer without penalty.
- Lender, Insurance and Appraisal
After the inspection period there is still more to do. Your lender will ask you for more documentation at this time. It is important you turn this in as soon as they ask to allow the loan to go through the various processes and be able to close on time. We are here to facilitate this process with you to ensure all goes smoothly. It Is at this time you will also obtain insurance on your new home, a requirement of your lender in order to fund your loan. Before the loan can get the final approval for closing, the lender will also schedule an appraiser come out to appraise the home. We make sure this is done in a timely manner that meets the necessary deadlines.
- Clear to Close
The day is almost here and there are many moving pieces at this point to ensure all goes smoothly. We are now in contact with you, the lender, and the title company to hear our favorite words, “Clear to close” so your closing date and time can be scheduled!
- Final Walk Through and Closing Day
We made it to closing day! We schedule your final walk through just before closing to make sure everything is as it should be and address if it is not. If all is good it is time to go to the closing, sign your documents and let us hand you the keys to your new home! CONGRATULATIONS!
As your Buyers Agent, we are here for you even after you close on your new home. Whether you decide to hire an interior decorator, remodel your kitchen, install a new air conditioner, or need a repair please get in touch with us to help you.