Real estate buyer's agent

November 10, 2005 8:56 AM

We're looking to buy a condo/house and wanted to know what your experiences with a buyer's agent were.

The sellers of a particular place we're interested in have their own agent, but we heard it was a good idea to have your own representative, looking after your own interests, and the agent's fees would be split among the seller's agent and ours. Is this the case? Most resources I've look up only talk about one or the other, having a seller's agent or a buyer's agent, but not what happens when there are both involved in a sale/purchase. Any information on the process would be greatly appreciated!

posted by Blue Buddha to home & garden (12 comments total)

Yes, you should have an agent of your own. They buyer's agent will get his income in splitting the comission on the sale with the seller's agent.

Most resources I've look up only talk about one or the other, having a seller's agent or a buyer's agent, but not what happens when there are both involved in a sale/purchase.

That's because you don't need to worry about this. Go and get a buyer's agent, it is their job to walk you through this process, and the cost to you is minimal.
posted by poppo at 9:05 AM on November 10, 2005

I see you're in Canada. Just wanted to point that out for potential commenters. (That's pretty much the norm here in the U.S.--to have both Buyer's and Seller's agents.)
posted by deadfather at 9:09 AM on November 10, 2005

The mere fact that you're asking if you need one suggests that your experience in the matter is limited. Therefore, I highly suggest that you get someone professional on your side as well. You are about to negotiate an investment of your hard earned money, as well as a dwelling.
Their agent is looking after their best interests, NOT yours! So you need someone on YOUR side.
Our very recent experience: We are closing on a HUD home in one week that our agent found for us. It has been appraised for $20K more than we paid for it! I don't think I could have done that on my own.
Good luck with your adventure.
posted by UnclePlayground at 9:10 AM on November 10, 2005

We just purchased our house using a buyer's agent and were very happy with the experience. We used an agent who functions only as an agent for buyers. Our agent guided us throughout the entire home-buying process and made sure that all documents were prepared on time. She shared the agent's fees with the sellers agent. Using our own agent gave us an added measure of confidence during the process. We also had our attorney look at all the documents and we used a home inspector recommended by our attorney. That is probably the one, most important part of the purchase...get the property inspected by a reputable, independent home inspector.
posted by tzuzie at 9:15 AM on November 10, 2005

get the property inspected by a reputable, independent home inspector

Just repeating that because it's important advice. Also, remember that the inspector works for you. Be an active part of the inspection. You might spot things that bother you or just have general that the inspector can enlighten you about. Ask lots of questions. The best ones are incredibly knowledgable, especially about any local climate/land/pest control/vegetation/etc issues, so get your money's worth.

And yes, unless you have deep knowledge of the local housing market, lots of property buying experience and a network of contacts in the local area, get a buyers agent.
posted by normy at 9:50 AM on November 10, 2005

My experience is that the buyer's agent is largely useless. However, it costs you nothing, so why not.
posted by knave at 11:16 AM on November 10, 2005

What differentiates a buyer's agent from other kinds of brokers? For example, if I contact a real estate agent and say "I'm looking to buy", how do I know they're not just hooking me up with one of their sellers?

Are there particular terms to use to describe this relationship?
posted by Caviar at 11:25 AM on November 10, 2005

And please be sure to have an experienced real estate lawyer.

Yes, I know you love your cousin Vinnie, but just because he's a lawyer, you shouldn't be using him unless he's experienced in real estate transactions. You don't want to get screwed by his inexperience while making a major lifetime investment.
posted by raedyn at 11:39 AM on November 10, 2005

What differentiates a buyer's agent from other kinds of brokers? For example, if I contact a real estate agent and say "I'm looking to buy", how do I know they're not just hooking me up with one of their sellers?

Most agents act for either the buyer or the seller depending upon who approaches them. If you go to an agent affiliated with a large real estate agency chances are that that agent will be a dual agent and may very well hook you up with one of their sellers. That's not necessarily a bad thing. To find an agent that deals exclusively with sellers I went to
National Association of Exclusive Buyer Agents
This association covers agent in Canada.
posted by tzuzie at 1:40 PM on November 10, 2005

You would actually probably be better off without the buyer's agent at this point. The main thing that a buyer's agent does (that a good real estate lawyer won't) is find you potential houses to buy.

You've already found a potential house, you just need someone to represent you so you don't get screwed. Your attorney can do this. If you hadn't found a house yet, a buyer's agent might be very helpful. Save the hassle, get a lawyer (which you would need anyway), and possibly even use that to knock off a few bucks from your offer.
posted by MrZero at 5:02 PM on November 10, 2005

If nothing else, a buyer's agent (unlike the lawyer that MrZero suggested) should help you with negotiating a price. What you want is called "comparable market analysis" (CMA); your agent should be able to find some houses of about the same size, in the same neighborhood, that have sold recently.

A buyer's agent can also walk through the house and give you feedback about advantages and disadvantages; talk to you about contingencies (inspection, financing, etc.); help you through the inspection process (negotiating with the sellers about repairs or adjustments to the price), etc.

A lawyer will cost you extra; a buyer's agent gets a commission from the sale. (In the U.S., typically, the total commission is 5 to 6 percent; the seller's agent and buyer's agent split that equally. If one agent represents both buyer and seller, he/she keeps the entire fee - there are NO savings to you.)

Do keep in mind that a buyer's agent is motivated to get you to purchase (at which point the agent gets paid). So it's ideal if you can get an agent who is recommended by a friend or someone you know at work, rather than selecting one at random.

In the U.S., only a very small percentage of home buyers use lawyers for routine home purchases; it's sort of extra insurance for situations that virtually never need it, since forms and processes are relatively standardized these days.

There are certainly good books out there on buying a house; for $30 or so, they can help a lot.
posted by WestCoaster at 12:25 PM on November 11, 2005

I agree that a lawyer should not be used for the price negotiations. This is (part of) what a buyers agent will specialize in.

But I reiterate that you need a lawyer to help you with the closing. IANAL, but I work in a municipal tax office. I have seen people buy houses that have tens of thousands of dollars in tax arrears. The bills stay with the title. So now the new owner is responsible for paying these huge bills. Sometimes people lose the house because of this. It's rare, but it's a tragedy. And an experienced real estate lawyer will catch this problem before it happens and make sure that all leins against a property are discharged.

Surely the money a lawyer costs you pales in comparison to losing the entire property and your entire investment in it. The laws will vary between jurisdictions, but this is exactly what a lawyer is for. To cover your ass, because you can't be expected to know all the ins and outs, and it's their job to know all that.
posted by raedyn at 12:26 PM on November 14, 2005