Why work with a Buyer's Agent?

You have a big decision to make as a first time homebuyer and the level at which you are being represented will be impacted by your decision.

Scenario 1 (Dual Agency): You start looking for houses online, call a few of the numbers and set up showings. Perhaps you drive around town and visit a few open houses, chatting with the listing agent about the house. Eventually you find one you like and fill out the necessary paperwork to make an offer.

The problem with this scenario: You do not have an agent who is 100% on your side. If you fill out a purchase agreement with the agent who has the house listed, they are required to equally represent the seller's best interest and the buyer's best interest (dual agency). According to the law they are not allowed to negotiate for your best interest alone.

Scenario 2 (Buyer's Agent): You decide you're interested in looking at a few homes so you call an agent that you know, someone other than the agent who has the houses listed. This is the beginning of a relationship with a Buyer's agent. The role of a Buyer's agent is to represent the best interest of the BUYER exclusively - 100%. This means that they have more power to negotiate on your behalf, because they are in no way obligated to represent the seller's best interest.

The great thing about this scenario: It's FREE! Even though the buyer's agent commission is eventually paid by the seller, at closing, their obligation is to the buyer alone during the transaction.

NOTE: If this sounds too good to be true, well, it used to be in MN! In the past (up until about 1993) only the sellers had representation in the transaction. Thankfully, buyers can now have someone on their side, IF they make the right choices along the way.

ANOTHER NOTE: In both of the above scenarios the "Agent" is actually the company/brokerage that the saleperson works with. For example, if Sally Smith is a real estate agent at XYZ Realty, you are signing up to be represented by XYZ Realty. What this means for you as a buyer? If Sally takes you to a house that is listed by Joe Nelson, also with XYZ Realty then you are in a Dual Agency situation and Sally can no longer represent the buyer's interests alone.

WHAT SHOULD YOUR BUYER'S AGENT BE DOING FOR YOU?

By law the Buyer's Agent owes you the following duties:

Loyalty - will act only in client's best interest
Obedience - will carry out all client's lawful instructions
Disclosure - will disclose to client all material facts of which broker/salesperson has knowledge which might reasonably affect the client’s use and enjoyment of the property
Confidentiality - will keep client's confidences unless required by law to disclose specific information
Reasonable Care - will use reasonable care in performing duties as an agent
Accounting - will account to client for all client's money and property received as agent

In addition to the legally required duties, more specifically, a Buyer's agent should:

- Guide you in finding properties that fit your desired criteria.
- Explain paperwork thoroughly and give you a chance to ask questions so that you feel completely comfortable throughout the process.
- Research and share information about properties comparable to those that you may make on offer on - so that you feel confident that you are offering a fair market price.
- Share knowledge and resources related to first-time homebuyer programs, financing options, who you could contact for more detailed loan information, etc.
- Keep you informed at every step of the process, from search to offer to closing!