Choosing the right buyer’s agent can be difficult. Not many home buyer’s understand what exactly a buyer’s agent/broker does exactly. Well, here is where it is spilled.
Simply put, when an agreement is entered with a Realtor to show homes. The Realtor becomes the buyer’s agent and advocates for the buyer 100%.
I see it all the time when buyer’s call of listings or internet inquiries. They say “we will just go to the listing agent when we are interested in buying”. I hear that and cringe, why would someone pass up representation. Most likely the buyer doesn’t understand the process, but that’s why I am here.
Is the listing agent really looking out for the buyer’s best interest when dealing in single agent dual agency?
Unfortunately not and here is why. The listing agent has had a long standing relationship with the seller so they are more than likely going to push the sale through without watching out for the buyer’s best interest. Although they always say they are, I find it hard to believe and a sprint fast towards the door should be used if you ever hear it. The double commish is what they have in mind.
Make sure that you choose the right representation when selecting a buyer’s agent. Being comfortable with the agent that you select will help make the transaction go a lot easier. Don’t pick them just because they are a friend of a friends, you stumbled into their open house or because they have a fancy website or blog.
If the buyer’s agent is showing you homes, they should be homes that fit your criteria, not theirs. You can always cancel the agreement with the buyer’s agent if things are not working out, just like a listing contract with a seller.
A Buyer’s Agent Role
A buyer’s agent in Minnesota serves many roles, but the main one is looking out for the clients best interest, 100% of the time. When you first work with a buyer’s agent, you will be presented with “Contract for Exclusive Right To Represent Buyer“, I always provide it upfront so there are any questions, you can always ask.
Advantages
- Be willing to show homes at any time
- Assist with financing options
- Provide sound advice and counsel
- Get information to gain negotiating edge
- Prepare off that is in the buyer’s best interest, not the seller
- Let you know it may not be the time to buy
- Market analysis together to make sure buyer is getting the best deal
- Provide other options
- Usually doesn’t cost a thing
These are just some of the advantages when working with a buyers agent.
Watch out for dual agency
This is a whole other topic and will touch briefly on it.
Be extremely careful when working in single agent dual agency, I strongly advise against it (notice how you won’t hear many real estate agents in Minnesota say that). Mainly because it isn’t in the clients best interest in any situation. Most agents tend to use the term “hogger” or single agent dual agency, that is when they grab both side of the transaction. You can’t argue in any circumstance where the agent has the clients best interest in hand, buyer or seller.
How does an agent act in the best interest of both parties when they are representing both buyer and seller? It’s impossible.
Here is the form for “Agency Relationships in A Real Estate Transaction” that is used in the state of Minnesota. Try finding that on any other website. The same form that is used by buyer’s agents.
What are your thoughts?
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I’ve wondered about this before. If a buyer approaches the listing agent directly, it seems like they may be able to negotiate down a share of the double commission, so perhaps saving 1-3% by not contracting with a buyer’s agent. That’s definitely not the right choice for many buyers, but it seems like a sophisticated buyer who knows what what they want and what it’s worth could save under this scenario.
The commission difference for an agent based on negotiations are nothing compared to what they make by simply getting the home closed, so I’m not entirely convinced that seller side agents have their client’s best interests at all times. Although just getting it sold is often their client’s interest.