I’ll come right out at the start and tell you I’m a real estate agent — Proudly so! Nice to meet you! I’m not trying to sell y ou anything, but I’m pleased to be of service. In fact, generally, real estate agents for buyers are paid for out of the listing agent’s commissions. So, I’m not looking to part you from your money. I’m giving you the benefit of experience and advice I have picked up in my career selling houses and being in the real estate transactions — for both sellers and buyers. Then, if you want me to help you find a house, we can talk, Call me if you need me.
Technology has changed the way homes are sought and bought today. In this “Information Era”, most buyers are first introduced to the home they eventually purchase via the Internet, through Zillo, Trulia, Yahoo!, Homes, Realtor.com and Redfin. These are the top five “Most Popular Real Estate Sites”, as derived from eBizMBA’s Rank, which is a continually upgrade average of each website’s Alexa Global Traffic Rank, and U.S. Traffic Rank, from both Complete and Quantcast.
So that means there’s no real need for a buyer’s real estate agent, right? If a buyer can find and visit a home on the web all on their own, why involve another party? The reason to use a real estate agent is to find a home and show homes available for sale, right?
WHY HOME BUYERS NEED A REAL ESTATE AGENT
Ah, not so fast, friend. The reason to use a real estate agent today are as valid as yesterday. The ease of online transactions and proliferation of services to assist buyers in handling their own real estate transactions came recently, arising throughout the last decade. This has caused buyers to wonder if using a real estate agent is no longer necessary, or an expense that can be avoided. While doing the work yourself can save you if you buy a “For Sale By Owner” (FSBO) house and the seller agrees to reduce the price by 3% (half of what a listing agent would receive), for many, a do-it-yourself home purchase might be pricier than a real estate agent’s commission in the long run.
Besides, a buyer generally doesn’t pay any commission to an agent on a house purchase. On most home sales, there is a “listing agent” (the agent engaged by the seller to sell the property) and a “selling agent” (the agent who introduces the eventual buyer into the transaction). The selling agent is sometimes called the “buyer’s agent” because he or she is often working on a certain buyer’s behalf and it’s easier than explaining that the selling agent is not the listing agent but really the buyer’s agent.
There are some real estate agent that market themselves as “buyer’s agents”, “exclusive buyer’s agents” or “buyer’s representatives”. These real estate agents have chosen to make a business of finding homes for prospective buyers and handling the negotiations and transactions attendant to the purchase. These agents want to accentuate the reasons a buyer shouldn’t go directly to the listing agent when they purchase real estate.
A buyer who goes directly to the listing agent and allows that agent to “manage” both sides of the transaction is dealing with an agent who has conflicting responsibilities. Their job is to get a good price for the seller, and they might not zealously represent the interests of the buyer. Those who market themselves as buyer’s agent indicate they’re only working for the buyer in a real estate transaction.
The buyer’s agent commission is paid by the seller, with rare exceptions. They either get paid directly by the seller or set up the transaction so that the seller provides a “credit” to the buyer for how much the real estate commission is – then the buyer pays the commission. A maxim in real estate is, “No matter how it’s set up, the buyer still walks away with the house and the seller still walks away with 94% of the purchase price”.
… to be continued.
Excerpted from my book “The Home Buyer’s Guide – Everything You Need to Know About Buying a Home”
Ricardo Parente, Realtor®
Coldwell Banker Realty | Winter Park, FL