What is a Buyer’s Agent?
A Buyer’s Agent provides services specially for the Home Buyer in real estate transactions and home searches. Arkansas Buyer’s Agent offers representation for the Home Buyer and work to protect that Buyer’s best interest, not the Seller’s. A typical real estate agent leans more towards offering the home Seller services in order to make a commision off the real estate sale.
What are the Responsibilities of a Buyer’s Agent?
A Buyer’s Agent represent the Home Buyer’s best iinterest in a real estate transaction. Buyer’s Agent are responsible for protecting the Home Buyer by representing them and providing them the security they need and deserve.
Here is a list of Fiduciary Duties To the Buyer:
CONFIDENTIALITY: Prohibits the agent from disclosing confidential information obtained from you such as: the price you are willing to pay, the amount of mortgage you are actually qualified for, how much cash you have to work with or, the level of your motivation to buy a particular home.
ACCOUNTABILITY: Requires the agent to properly handle all money received, including escrow deposits.
REASONABLE SKILL & CARE: Requires the agent to protect you from foreseeable risks, and to recommend that you obtain expert advice when your needs are outside the agent’s expertise.
LOYALTY, UNDIVIDED: Prohibits the agent from advancing any interests that are adverse to your own, including the agent’s own interests.
OBEDIENCE TO LAWFUL INSTRUCTIONS: Requires the agent to act subject to your control, and for the agent to obtain and follow all lawful instructions from you.
FULL DISCLOSURE: Requires the agent to disclose all information concerning your home purchase, which might effect, your best interests. Things such as the seller’s motivation for selling, price comparables for similar homes in the area, deferred maintenance or defects in the home, listing history of the home, and any potential problems that might affect the value of the home.
The Historical Model
Historically, most people began their home buying search by contacting real estate agents about homes advertised in home magazines and 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 with “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 be 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 home buyers were not aware of this practice.
If you are offended by this, 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 home buyer.
Real Estate Brokerage Today
Today, “traditional” real estate brokerage is past. The state of the art in brokerage services for the home buyer is Buyer Brokerage. 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 buyer’s 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.|
|Lender Selection and Loan Pre-Qualification or Pre-Approval: The selection of the best lender is generally a decision based upon the best rates and service, and a Buyer’s Agent in your destination city should be the best person to assist in this often-times confusing process. Today, most buyers are better served by pre-qualifying or even better still, being pre-approved for a loan prior to beginning the property selection process.|
|Assistance With Property Selection: Help in finding the best property, with access to the 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., pre-contract appraisal, 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, health care providers, dry cleaners, vets, doctors, telephone service, housing painting, hardware, repair services and more. A buyer agent’s role as a good communicator is key here.|