Here at Solutions, we often get asked many questions by prospective Buyers, but one in particular tends to stand out – “How do we, when we work as Buyer’s Agents, get paid?”
Our answer is very simple – as Buyer’s Agents, we don’t work for free, but it’s the Seller who pays our fee, not the Buyers themselves.
The Seller, who has already entered into a listing agreement, pays both their listing agent and the Buyer’s agent at closing. Keep in mind, and this is very important, the Seller’s Listing Agreement is separate from any Purchase Contact.
Home Buyers should always have their own agent to represent their best interests. Buyer Agents work to negotiate the best terms and price for the Buyer. Best of all, the Buyer Agent’s services are free to the Buyer.
Most people think they have to pay a sales commission. The truth is this: Only the Seller pays the commission.
Whether a Buyer uses an agent or not, the Seller still pays the commission. The only person that wins when Buyers are not represented is the listing agent. We’ve covered the issues with dual agency – where the listing agent represents both the Seller and Buyer – in another recent blog.
Buyer Agency Agreement
Most Buyer Agents will have their clients sign an agency agreement, an Exclusive Buyer Agency Agreement. It outlines their services, how they are compensated, and how the two parties will work together.
In Virginia we’re required to have a prospective client acknowledge in writing – before being shown a house – that they have been informed and agree to the laws of Buyer Agency. The agreement can be for a single house, for a given day, or you can opt for non-representation.
Here is the link to our website that can explain it better:
Remember, you wouldn’t hire your boss’ attorney to represent you in your workman’s compensation case. The same goes for real estate. Why use the Seller’s agent to negotiate your best interest? This is an inherent conflict of interest.
The home buying process is stressful enough without worrying about who you can and cannot trust. Your Solutions Buyer’s Agent is your trusted advocate.
Buyer Agents and the Agreements
According to most Buyer Agency agreements, the Buyer’s Agent must do these things:
Protect their client’s financial information
Negotiate the best possible price for the Buyer
Must disclose to the Buyer if they’re working with another Buyer interested in the same property
Show all properties the Buyer is interested in that fits their criteria and budget
Connect you with the service providers—inspectors, lenders, home warranty companies—to best suit your needs
The Buyer also has some responsibilities to their Buyer’s Agent:
Buyers must work with their Buyer’s Agent exclusively
Buyers should never give personal information to any other agent
Buyers should not call other agents to see properties, even if they think they are saving their agent some time and effort
Buyers should clearly define their must haves and deal breakers to help their agent streamline the showing process
Home buyers are at a premium in today’s housing market. Buyers should interview agents just as Sellers interview listing agents.
Make sure the Buyer’s Agent you select is familiar with the type of property you want to purchase, the area you want to buy in and the particulars of your situation.
Your Solutions agent is only as effective as the information they’re given. With that information, your Solutions agent will be able to help identify and find your dream home and help you navigate through the entire process to a successful closed sale and solution.