FAQs About Buyer Representation

By
Real Estate Agent with Prudential CT Realty
http://actvra.in/9nC
When I am speaking for the first time with potential buyers, one of the most misunderstood aspects of buying a home concerns buyer representation. Although we have had buyer representation in Connecticut since 1996, many people still do not understand that, as buyers, they have the right to have an agent who solely represents their interests. Here are some of the most common questions about buyer representation. I hope this will clear up WHY you need buyer representation!

What is buyer representation?

When you agree to work with a buyer's agent, you have the benefit of someone representing your best interests and negotiating on your behalf. The agent has a fiduciary responsibility and pledges to you loyalty, confidentiality, obedience, accountability, reasonable care, and diligence. These are not just words; you have an agent that helps you through every step of the transaction and puts your interests above everyone else's, including her own.

Can't I just call the agent whose name is on the sign in front of the house?

You can call that agent, but you must remember that he/she is representing the seller and will work in the seller's best interests. The agent can show you the house, and you must either consent to unrepresentation (you are on your own) or dual representation. If you choose to be unrepresented party, you must sign a paper that says that you understand that. If you want the agent to represent you, both you and the seller must sign papers that you agree to dual representation, and the agent will do his/her best to represent both parties fairly. A third option is that the agent can assign another agent from her broker's office to represent you, in which case you will have designated agency. But my question to you is: Why would you not want to select your own agent who works just for you?

Won't I get a better deal if I go to the listing agent?

This is a misconception that persists among novice buyers. Some people think that an agent will talk the seller into accepting a lower offer if that agent has both the buyer and seller because the agent will be getting all the commission. The reality is that the agent may be representing both parties, but the people in control of the final outcome are the seller and the buyer. If the seller doesn't want to accept your offer, it isn't going to happen. If you, the buyer, don't want to agree to the terms, it isn't going to happen either. Wouldn't you rather have an agent who will negotiate fully on your behalf so that you don't have to worry about where someone's allegiance lies?

Can you show me properties that aren't your listings?

Yes! Not only can I show you any property that is listed on MLS but I can also show you For Sale By Owners (FSBOs). When the sellers list their homes for sale, they agree to pay the buyer's agent if they sell the home. The same is true for most FSBOs as well. The owners of FSBOs save money by not using a seller's agent, but most agree to pay a buyer's agent a commission. So if you see a property that interests, just let me know and I will arrange for us to see it.

How much does buyer representation cost?

In 99.9% of the cases, the commission is paid by the seller, so buyer representation costs you nothing. I have never had an instance where a buyer has paid my commission, even with FSBOs. The buyer representation agreement, however, will spell out that you will be responsible for my commission if the seller does not pay. But two things are important here: First, it is extremely rare; and second, we generally know ahead of time if there are any issues with the commission.

Do I have to sign anything?

Yes, our agreement is called Exclusive Right to Represent Buyer/Tenant and it outlines what each of our responsibilities are. State law requires that I can only show you other brokers' listings if we either have an Exclusive Right to Represent agreement or if I have permission from each seller to show you the property. Rather than getting permission for each property, the Exclusive Right to Represent allows me to show you all properties that are listed by any broker. When we meet, I will go over each section of the agreement so that you understand it, but essentially is says that for a period of time we will work together in an agency relationship and that I will represent you in the purchase of your new home or land. You agree that you will use me exclusively as your agent and will let others know that you have signed a buyer representation agreement. This protects you, me, and other agents by letting them know that we have an exclusive relationship.

How long do I have to sign the agreement for?

The period of time that we are under agreement is negotiable. I want our relationship to be a mutually satisfying one, and I believe that we should both want to work together. For that reason, I encourage you to select a period of time that you feel comfortable with. If you don't want to sign a long agreement at first, that's fine with me; we can always extend it later if we both agree.

What else do I need to know about buyer representation?

The other thing that many homebuyers don't understand is that buyer representation not just about finding the property and writing up the contract. A buyer's agent is critical in the steps leading up to the closing. The inspections need to be done, and inspection issues need to be negotiated. After inspections are completed, a buyer's agent will monitor the mortgage process, make sure that the commitment date is met, and make sure that the final walkthough meets the buyer's approval. Any extra services, such as coordinating attorney services, utility switchovers, and verifying that inspection issues have been completed may be part of the agent's responsibilities. This conversation does not happen over the phone. I always meet with a potential buyer first so we can discuss each step in the homebuying process. I want to provide as much information as possible and answer any questions they have so they will feel comfortable about the process. After I have explained what buyer representation is, I will ask them to sign an Exclusive Right to Represent agreement. I want them to feel comfortable that I am going to work for them, but I also want to know that they are committed to me. We go over everything they will need to do for homeownership:
  • Do they understand each step of the homebuying process?
  • Do they understand that the monthly payment includes mortgage principle and interest, taxes and insurance?
  • What do they need to provide to a mortgage lender to see what they qualify for in a mortgage?
  • What is the timing? When do they need to move in? Do they have flexibility?
  • What are their criteria for their first home? Are they flexible in what they must have and what they would like to have?
  • Are there any other decision makers?
I hope this answers some of your questions about buyer representation. If you have any other questions, please ask. Or give me a call and we'll get started!
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Peggy Chirico

 

 

Peggy Chirico, REALTOR®
Serving the Greater Hartford Area
Prudential CT Realty
peggychirico@gmail.com

860-748-8900

If you are buying or selling a home in Hartford County or Tolland County, please call me, email me, or visit my website.  I would be happy to help you with your home search or provide a market analysis for your home.

Find your dream home now!

                                                                       

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Re-Bloggged 43 times:

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Topic:
Home Buying
Groups:
1st Time Buyers
First Time Homebuyer
Realtors®
Tags:
buyers agent
buyer representation
buyer agency

Comments 87 New Comment

Show All Comments
Rainer
421,810
Peggy Chirico
REALTOR® 860-748-8900, Hartford & Tolland County Real Estate
Prudential CT Realty

Hi Praful - Thanks. I'm glad it was helpful.

Thanks, Tricia - I was hoping it would be very understandable since the topic is so misunderstood by buyers.

May 10, 2011 03:56 PM
Rainmaker
36,244
Debby Singleton
Top Producer since 1993
Springer Realty Group

This is a very thoughtful, thorough and well-written blog.  Thank you!

May 11, 2011 06:59 AM
Rainmaker
347,753
Sylvie Stuart
Home Buying, Home Selling and Investment - Flagstaff, AZ
Keller Williams Check Realty 928-600-2765

Great explanation! This is a commonly misunderstood topic and you did a great job laying it out!

May 12, 2011 02:43 PM
Ambassador
983,564
Alan May
Evanston & Northshore of Chicago real estate
Coldwell Banker Residential

We have no such "legal" requirement, in Illinois, that buyers must sign an exclusive buyer's agreement in order for me to show them homes as a buyer's agent.

But otherwise, this is an excellent, and comprehensive post of buyer's agency in Illinois as well.

September 14, 2011 08:45 AM
Rainmaker
267,547
Tamara Inzunza
Homes for Sale In Alexandria VA & South County
RE/MAX Executives / www.MovingToNova.com / 703-623-8759

Very well written and easy to understand.  Add me to the list of rebloggers!

September 14, 2011 09:40 AM
Rainmaker
645,151
Team Honeycutt
Allen Tate

Excellent post.  I copied and printed for future use.  That answers questions in a good way.

September 14, 2011 02:30 PM
Rainmaker
824,184
Marc Swartz
CPA, CA - Toronto, Durham & York Regions, Ontario

Hi Peggy - Your post is well written.  With some modifications, it could be rewritten for my area.

September 15, 2011 06:12 AM
Rainmaker
54,567
Tere Episale
Wanaque Haskell NJ Real Estate
Century 21 Crest Real Estate

Excellent post! Thank you

September 15, 2011 09:13 AM
Rainmaker
805,723
Gail Robinson
REALTOR, GRI, e-PRO, Fairfield County, CT
William Raveis Real Estate

Peggy - Great post.  The only thing I do differently is to narrow the agreement to certain properties for those who don't want to commit on the first meeting.  I still keep the six month period in case they want to buy one of the properties we see as it takes two to three months to bring most transactions through to completion.

September 15, 2011 09:24 AM
Rainer
16,907
Kerissa Payne
ABR, SRS, e-PRO, SRES
RE/MAX Legacy
Great post for potential buyers.
September 15, 2011 09:39 AM
Rainmaker
223,559
Laurie Mindnich

Hi, Peggy.  Wonderful explanation.  I'm curious- in New York, a buyer need not sign a contract in order for a Realtor to operate under buyer agency- but because all states differ, does Ct. require a contract?

September 15, 2011 10:40 AM
Rainer
121,805
Erna Neal
A Knowledgable Central Florida & Seminole County,
The Viking Team, Realty

Peggy, that's an amazing blog post. I just reblogged it. Thanks for writing it!

September 15, 2011 10:55 AM
Rainmaker
577,603
DeeDee Riley
Realtor - El Dorado Hills & the Surrounding Areas
Lyon Real Estate - El Dorado Hills CA

Hi Peggy,

Just came here after reading your post Understanding Buyer Representation.  Great job on this.  Though things vary slightly here in CA, you have touched all the main points!  Will have to work on something similar for my area buyers! 

September 15, 2011 06:34 PM
Rainmaker
1,033,776
Joan Whitebook
Consumer Focused Real Estate Services
BHG The Masiello Group

An excellent post and I hope that all buyers understand how important it is to have a real estate agent looking out for their interests!

September 15, 2011 10:23 PM
Rainmaker
97,789
Kristen Wahl
CBR
Re/Max Plus

What a fantastic post! There are so many misconceptions out there about buyer representation, and this helps clear up many of them. I'm reblogging this great post!

September 17, 2011 02:30 PM
Rainmaker
107,689
Mark Artesani
Huntington Bch Fountain Valley
Keller Williams Realty

I have a hard time selling Buyers contracts This will help. Well said.

September 21, 2011 08:28 AM
Rainer
91,862
Ranji Singh, SRES
Royal LePAGE York North Realty, Brokerage

Hi Peggy ...  this post is priceless. Thanks for sharing.

October 02, 2011 12:03 AM
Rainmaker
589,438
Jim Hale
On the Move for You! - Eugene - Springfield Oregon Real Estate
ACTIONAGENTS.NET

 

Great document.  Found it on a re-blog.  I can't agree with all of your arguments for exclusive buyer rep.  But you make the case well.

January 03, 2012 04:53 AM
Rainmaker
572,328
Phil Leng
Phil Leng Team - Residential Real Estate Experts &
Keller Williams Eastside Market Center

Hi Peggy,

Good post. Congrats on the feature!

My standard time line is a year.

Phil

January 03, 2012 05:17 AM
Ambassador
354,472
Rich Cederberg
eXp Realty
eXp Realty

Saw this got reposted.  Congrats.  So many buyers don't understand this information.  You spell it out in easy to comprehend terms every buyer should read!

 

January 03, 2012 07:41 PM
Show All Comments
Rainer
421,810

Peggy Chirico

REALTOR® 860-748-8900, Hartford & Tolland County Real Estate
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