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First Time Home Buyer? Hire An Agent!

Looking to Buy Your First Home? Hire a Buyer Agent.

First-time home buyers are generally engaged in some other business apart from real estate, so they tend to know very little about real estate. Most real estate agents are in the business full-time, so they acquire knowledge every single day. The business of buying a home is complicated, filled with paperwork; it requires expert negotiations and there are often small problems which, if left undetected, can easily blow up into proportions so huge that your entire transaction could be placed into jeopardy.

My advice for first-time home buyers is to hire a buyers agent to work for you. In almost every instance, the seller pays the fee for your buyer's agent, so it costs you nothing extra.

Hire the sellers agent?

There's a little unknown thing called a variable commission, which makes some buyers think they will get a better deal by going directly to the listing agent. This is how it works. Say the real estate agents commission is 8 apples, and the listing agent is willing to split that commission with a buyer's agent, so each will get 4 apples.

In a variable commission arrangement, the listing agent might have a side deal with the seller or make a side deal upon offer presentation. This deal might be if the listing agent happens to also represent the buyer, the listing agent might reduce the commission from 8 apples to 6 apples. Which would save the seller 2 apples.

First, realize the seller will eat those two apples and will not give them to the you. But if the buyer has reduced the sales price by, say, 2 apples, the seller will break even. Some people believe the listing agent has more incentive to push through an offer when the agent represents both parties in a dual agency capacity. Bear in mind that behavior is unethical. If it's true, do you want to work with unethical agent? Moreover, tell me please, how a listing agent can have a buyer's best interest at heart while representing the seller?

Hire a buyers agent?

A buyer's agent fiduciary responsibility is to look out for your interests first. A buyer's agent's duties are to:

  • Negotiate on your behalf.
  • Fight for the sales price, terms and conditions that best match your criterion.
  • Anticipate problems and head them off at the pass.
  • Tell you the truth.
  • Disclose defects the agent can see.
  • Provide you with seller disclosures and every piece of documentation to which you are legally entitled.

After you've bought a few homes and are used to the process, you might not need to hire your own agent to buy another home. But for your first home? Absolutely, hire a buyer's agent. Besides, you'll find that agents who specialize in working with first-time home buyers tend to derive a great deal of personal satisfaction in providing superior customer service and making their buyers' dreams come true. Those are good qualities in a buyer's agent.

Looking To Buy or Sell Your Home?

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Posted: Monday, December 01, 2014 6:41 PM by Sutton Realty

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