Is Buyer Agency Really Free?

   

Is it too good to be true? Can I really get someone to represent my best interest at no cost? In most cases, yes! 

  AHA!! There it is!  "MOST CASES", I knew it was too good to be true.  

Hold on... don't go jumping to conclusions.  I have been helping my clients buy homes for 10 years and have never had to charge one of them a penny for my services. Listing Agents offer out a portion of their commission to a Buyer's Agent that brings a willing and qualified Buyer to the closing table. 

  Why would they pay someone to represent the buyer and negotiate against them and their client?  It sounds fishy to me... To understand why this is, you need to review a bit of the history behind the concept. Back when Ward and June were looking for a  home big enough to house Wally and Beaver, they called a local Agent who would show them homes that they wanted to see. The difference was that the Realtor was technically working for the Listing Agent and co-representing the Seller of any homes he showed and would receive a pre-determined portion of the commission.  This is what is known as Sub-Agency.

  As time went on this system was looked down upon by many Consumer Advocates that felt it was unfair for representatives of the Seller to have intimate information about the Buyers financial information and negotiating strategy. In many cases the Buyer's weren't even aware of the fact that the Agent showing them homes actually represented the Seller. This brought to light the concept of Buyer Agency, where a consumer would be able to enter into a contract with a Buyer's Agent who would represent their fiduciary interests and have access to the same commission split as someone working as a Sub-Agent.

 As you may imagine, Buyer Agency was not a very popular among the Real Estate industry. If YOU think that paying someone to negotiate against you sounds fishy, just think about what the person paying thinks about it. As time went on and more and more buyers were educated on the benefits of having someone working with their fiduciary interests in mind, it has become common practice. 

 In some cases, such as a "For Sale By Owner" who is not offering out a percentage of sale to Buyer Agents or If a listing agent isn't offering out enough of a percentage, you may have to compensate your Buyer's Agent all or a portion of their required fee. Again, this is very rare and you can write into the contract that the Seller would need to pay the extra money from their proceeds. 

 Buying a home is more than finding a home a putting in an offer.  Having a representative to  act as a buffer between you and the Seller during the initial negotiation, potential post inspection negotiations, the underwriting process and getting to closing will take the stress away. 

 Make sure this milestone event is one that you can look back on with fondness and not an excruciating process never to be repeated. (how's that for hyperbole?) 

  Since we are talking about FREE STUFF, click here to get our FREE "Prepare to Purchase Buyer's Guide" Learn the common costs, prepare for the pre approval process and get tips and tricks that will help you along the way.