Are you thinking it might be the right time to buy a house? If so, you need to give some serious consideration to the type of agent you will use to help you in your search for your dream home. While many first-time home buyers may not realize it, the agent they choose may not always be able to act in their best interests. This is because there are basically three different types of real estate agents.
Seller's Agent
The most traditional type of real estate agent is known as a seller's agent. This agent automatically owes a responsibility to the seller to get them the best price and terms possible for the property. As a result this means that they cannot tell you whether the seller would accept a lower price or better terms.
Dual Agent
Some agent's are what is known as dual agents. A dual agent has a duty to be honest and truthful with both the seller and the buyer as well as to make full disclosure to both parties. As a buyer you should fully understand; however, that a dual agent is not required to disclose information such as the lowest price or terms the seller will accept. Along the same lines, a dual agent does not have a responsibility to disclose information to the seller such as the best terms and highest price you are willing to offer.
Buyer's Agent
The third type of agent is a buyer's agent. A buyer's agent has a responsibility to look out for your best interests in the transaction. This type of agent can also assist in helping you to determine the advantages and disadvantages of each property that you consider while shopping for a home.
Due to the inherent conflict of interest, an agent must provide full disclosure to you regarding who they represent in the transaction. When there is only one agent in a transaction the agent is usually a dual agent. This can be dangerous territory for both sellers and buyers because it can be difficult for even highly professional agents to walk such a fine line.
Ideally, it is best to work with a buyer's agent when looking for your next home. Keep in mind that any real estate sales agent or a broker can act as an exclusive buyer's agent in your transaction; however, the agent won't be able to represent you exclusively if you become interested in a home that the agent listed for sale. In that case, the relationship would revert to a dual agency relationship.
Depending on your agreement with your buyer's agent it should be further understand that you may be responsible for paying a portion of the agent's commission. Generally the sales commission is paid by the seller when the transaction is completed. Generally the sales commission is split 50/50 between the buyer's agent and the seller's agent and may be paid by the seller. That commission typically comprises approximately 6% of the sales price of the home; meaning that 3% of the final sales price would go to the buyer's agent.
Under certain circumstances; however, you could become responsible for a portion of that fee. For example, if you are working with a buyer's agent and the home that you wish to buy is ‘For Sale by Owner' you may find yourself responsible for the buyer's agent's portion of the sales commission if the seller refuses to pay the agent's fee.
While it is possible that you may be responsible for paying at least some of the buyer's agent's sales commission it is still advantageous to consider working with an exclusive buyer's agent. The assistance a buyer's agent can provide to you in not only finding the best house for your needs but also in getting the best terms and price can more than make up for the commission.
When looking for a buyer's agent it is important to make sure you spend some time looking for an agent that you feel comfortable working with. After all, this is the person who will be assisting you in finding the home that hopefully you will live in for a long time. Take the time to ask around with friends, family members and business associates for referrals. Don't overlook asking for references and be sure to follow up by speaking to former clients. Avoid signing any buyer's agency contract that exceeds 30 days just in case you realize you need to make a change in agents.
A home purchase is a major investment that most consumers will spend a number of years paying toward. As such, you deserve to get the best price and terms possible for your dream home.
Andrew owns a website that provides assist in various aspect of home buying process. You can visit his website at: http://www.buy-and-sell-house-fast.com
