Buyer Advantage vs Exclusive Buyer Agency Agreements
Historically, most people began their home buying search by contacting real estate agents about homes advertised in home magazines, newspapers, or advertised by way of “open houses” or “for sale” signs posted on the front lawn. Through this process they would very often make contact with an agent who seemed pleasant and knowledgeable and would begin looking at homes for sale as “their agent.” What they generally did not know, however, was that the person they considered “their agent” was, in fact, the seller’s agent.
As a seller’s agent, “their agent” was bound, legally and ethically to look out for the seller’s best interests, not the buyers. Therefore, information shared by the buyers with “their agent” relative to negotiation and pricing strategies would, as a matter of agency law and ethics is required to be communicated to the seller. Likewise, opinions offered by “their agent” concerning any matter relating to the transaction would be those designed to help the seller achieve their goals: the highest price on the best terms.
Often privileged and confidential information, for example “my negotiation range” or an admission that “this home is the one for me”, would be relayed as a matter of law and ethics to the seller via that chatty, cheerful helpful real estate agent who was kind enough to escort the buyers through a selection of homes. If this surprises and shocks you, do not feel alone. A number of national surveys have concluded that most homebuyers were not aware of this practice. If this offends you, you are not alone. It was this reaction that led to a transformation in the delivery of real estate brokerage services nationwide. This sense of astonishment at how business was conducted in the past has resulted in the concept of “Buyer Brokerage” and with it a revolution in the way real estate services are delivered to the homebuyer.
Out of consumers concerns, two basic types of service emerged:
1. The Exclusive Buyer Agency type of service where customarily the buyer agreed to pay a commission to the agent on any real estate purchase. Under this type of buyer agency contract one broker (firm) is selected by a potential buyer to represent him or her in the purchase of a property on an exclusive basis. The buyer agrees not to work with any other broker (firm) in the purchase of a property. The employed broker is the only real estate agent with whom the buyer can work to locate and purchase property. When the buyer has signed this exclusive buyer agency contract, all the agents working for that firm become subagents of the buyer. The buyer, however, may not be restricted from buying directly from a property owner, but the language in the contract can still require the buyer to pay the broker a success fee.
2. Buyer Advantage Agency is a hybrid service brought about by increasingly competitive markets and aggressive agents striving to earn more business by giving superior service. Buyer Advantage Agency generally offers all the positive respects of the Exclusive Buyer Agency plan but eliminating the negative aspects of a success fee should a homebuyer decides to buy from a private owner, without an agent involved. The state of the art in brokerage services for the homebuyer is Buyer Advantage Agency. This is the answer to the question of how to ensure that both parties to a transaction receive the same level of effective, confidential representation and service both need and deserve. While a seller’s agent, often referred to as a “listing agent”, pursues the seller’s agenda of obtaining the best offer at the highest price, a buyer’s agent is free to devote their full attention to the buyers needs and goals. In fact, a buyer’s agent as a matter of law and ethics is bound to serve the needs of their principal, the buyer.
Finally, buyers today have an opportunity to enjoy the same level of effective, confidential and professional services that historically were available only to the seller. Buyer- consumers now control their own inside track. Some of the needs served by a Buyer’s Broker include:
Needs & Goals Assessment:
Enables a buyer to obtain counseling confidentially with a Buyer Broker without fear of harming their negotiation position. As the Buyer Broker owes undivided loyalty to their buyer-client, they are also in a position to speak frankly about the range of available home purchase options.
Assistance With Property Selection:
Help in finding the best property, with access to the entire market. Properties not listed for sale, For Sale By Owner Properties, lender owned properties and one of the hot tickets today, foreclosure properties, are all possibilities with a buyer broker’s assistance. Assistance
With Property Evaluation:
Performing due diligence evaluation of a candidate property, e.g., warranties, title search, title insurance, attorney services, professional inspections, and other objective evaluations to determine positives and negatives, would all be available with the advice and guidance of a buyer broker.
Structuring the Purchase Offer and Negotiation:
Not enough can be said about the importance of crafting a winning strategy during this phase of the home buying process. The inclusion of protective clauses in purchase offers, proposing alternative financing arrangements, and implementing negotiating strategies designed to maximize the buyers’ goals are crucial during the negotiation phase.
Pre-Closing Follow Through:
The successful resolution of pre and post closing issues that may have arisen during the negotiation and offer process must be accomplished to the buyer’s satisfaction. This may include, in addition to any issues raised during the Property Evaluation phase, assistance with selection of landscaping, moving and storage, temporary housing, insurance, vets, doctors, telephone service, housing painting, hardware, repair services and more.
A buyer agent’s role as a good communicator is key here. Home Buyers prefer to work, whenever possible, with Buyer Advantage Agents. Generally, they are best suited for providing client-level services to satisfy a buyer’s needs, concerns and expectations. Buyer Advantage Agents, being specialists in that they only represent the buyer, are able to add greater economic value to a buyers transaction.
Our TEAM offers the revolutionary new Buyer Advantage Agency, allowing every member to give complete representation to a Buyer (i.e. suggest a negotiating strategy, disclose any information about a seller, keep all confidential information about the Buyer ABSOLUTELY SECRET!)
An Exclusive Buyer Agent will Always: Negotiate with sellers to get you the best price and terms possible Include an inspection contingency in any offer or contract Make every effort to acquire the best terms possible for you Negotiate lower loan processing fees Minimize your closing costs by moving expenses to the seller when possible.
Our mission is to provide homebuyers with: Exclusive representation Advocacy Counseling Full fiduciary duties of: Undivided Loyalty Confidentiality Full Disclosure Obedience Reasonable Skill and Care Accountability What Does it Cost Me? In almost all cases, the brokerage fee is paid by the seller through its listing agents
Many Buyers want to view open houses on their own without an agent, intending to contact them later, But Beware! If you, the Buyer, decides to purchase the home you viewed with the Seller’s agent present and NO Buyer’s Agent, you can no longer get Buyer Agency unless you agree to pay the entire Buyer’s Agent fee. You end up having to pay for all of the Buyer’s Agent Representation out of your own pocket. Keep this in mind, and always call us when viewing homes, it could save you thousands of dollars.
For further information on comparisons between traditional real estate agents and Buyer Advantage Agency, Contact Us.
Important Note: Buyer Advantage Agency agreement MUST be requested in ADVANCE and in WRITING – It doesn’t automatically apply for just joining the VIP Buyer’s Club to receive Hot New Listings or Future Notifications.
For more FACTS and Additional information about Roatan: Order our FREE NEWSLETTER Your Suggestions are Welcome!
Please contact us with your comments on how we may improve our service or if we can be of service with any of your other Real Estate needs
Thank you for visiting Our Site Marci Wiersma
** Building Lifetime Relationships.One Home at a Time! **