Why Should You Use a Buyer's Agent?
Recently, a gentleman stopped in to our real estate office to ask for driving directions. As he was leaving, he volunteered that he lived 150 miles away and wanted to check out properties that he found on the internet.
A little too late to catch him, I wondered why he was looking at properties, all by himself, in an area he knew nothing about except from Internet information. His trip must have been costly in both time and money, yet he risked accomplishing very little more than when he last shut off his computer back home.
He evidently did not realize that times have changed in real estate. You can now engage an agent to act as your personal consultant. The term is “buyer’s agent,” an officially recognized position. The benefits are huge. In the old days, few buyers realized they had no representation.
Brief Buyer’s Agent History
Buyers were not always represented. The law of the land was “Caveat Emptor,” which is Latin for “Let the Buyer Beware.” Its first known use was in 1523. The first US Supreme case to lay down the law was in 1817, long before the National Association of Realtors (NAR) and the “Code of Ethics” came to be in 1903. Before that there were no formal rules governing transactions. I have found contracts for my ancestor Edward Champion Travis, to purchase property in Jamestown dating back to the 1700s. All transactions were technically for the best interest of only the seller. It wasn’t until 1995 that a Buyer Agency came to be recognized and adopted as part of the Code of Ethics for NAR, and has positively changed the relationships and negotiations in real estate transactions.
So How Can This Buyer’s Agent Idea Help You?
Buyers need representation because there are so many choices and so many unknowns--plus the housing market is still struggling to stabilize. In the case of the lost visitor who stopped in, I wish I could have engaged him in a conversation to determine his goals. Even if he was unclear, my experience in asking the right questions would have at least uncovered some basics.
If we had gone together, perhaps to just drive by his selections, I could have narrowed his choices plus added some to his list. If he did narrow his choices to just a few, I could have done more research on them to unearth valuable decision-making information for his next trip. Did he know that the barking dog next door could actually be a 24-hour kennel, or that there were plans for a commercial development down the street? Sometimes we are privy to information that only as a Buyer’s Agent we are able to share. More importantly, does he realize how difficult negotiations can be? A fair price, financing, inspections, repairs, etc., all have to be worked out.
My initial advice is, it is unwise to discuss personal matters like financial status, or motivation, since that is information could benefit a seller. For example, you would not go into a car dealer and say, “I just won the Lottery” and then expect to get the lowest price.
After our initial meeting, I would probably ask for a Buyer Agent contract that states I am his advocate on any property he chooses in this area for a certain period of time. I work hard to prove my value in that timeframe. Since there is no upfront fee, I carefully evaluate the seriousness of my client’s buying intentions before signing on as a buyer’s agent.
If we agree, the buyer’s contract frees me to work for my client’s best interest. I’m free to objectively advise on what properties meet my client’s goals, what properties do not and then how best to negotiate a sale in my client’s favor.
Most importantly, my clients are assured my loyalty is legally bound to them.
There is a big lesson here for Internet shoppers. The Net is a great place to start – it is not a great place to conclude, especially for properties in our unique Lakes Region. The bottom line is: Do not cheat yourself out of local experience plus professional service delivered under a nationally recognized Code of Ethics. It pays. In almost every transaction, my services are paid from the commission previously agreed by the seller.