Buying a Home: Why you need a Buyer's Agent
Purchasing a home is a significant step, whether you’re a first-time buyer or have experience in buying and selling properties. You might wonder, “If I can find all the homes to buy online, why do I need a Realtor?” Keep reading and I’ll explain why having a trusted advisor, aka a Buyer’s Agent, is crucial when buying a home.
Understanding Real Estate Agent Terms
Before we delve into the reasons for having a Buyer’s Agent, let’s clarify some key roles in real estate:
- Listing Agent (Selling Agent): Represents the seller and markets the home to potential buyers.
- Buyer’s Agent (Representative): Represents you, the buyer, in the transaction and helps you make offers.
- Dual Agent: Represents both the seller and the buyer (Note: This is illegal in many states, but allowed in Illinois with proper documentation).
6 Reasons to Use a Buyer's Agent when Buying a Home
- A Buyer’s Agent represents YOU and YOUR best interests
- A Buyer’s Agent knows how to make the best offer and negotiate when necessary
- A Buyer’s Agent has connections to resources you will need during your purchase
- A Buyer’s Agent may know of “off market” or “coming soon” homes not available in the MLS
- A Buyer’s Agent knows the proper procedures to follow throughout the transaction
- Currently, unless you buy a home FSBO (For Sale By Owner) or Off Market, You don’t pay your Buyer’s Agent directly
#1: A Buyer's Agent Represents YOU and YOUR best Interests
Suppose you find a home online and go to an Open House. It’s your dream home and you are ready to make an offer. The listing agent offers to be your agent too! Easy right? Truthfully, this does work sometimes in the right scenario. In Illinois, this is called Dual Agency. It can be very complicated for an agent to equally represent both sides of a transaction and this is why it is ILLEGAL in many states.
As a Dual Agent, the listing agent cannot help you negotiate. They cannot offer insight on things they might have seen in the home that could be a problem on inspection. They may promise to get your offer accepted, but at what expense?
In contrast, a buyer’s agent is going to only have you as a priority. They will make sure you make the most competitive offer possible. They will also have your back with inspection items and tracking all the steps of the transaction.
Dual Agency really benefits the agent, not the client. Currently, commission is negotiated with the seller and then a portion is given to the co-op agent. There are several lawsuits that may change this, but for now this is how most deals work. Therefore, unless some kind of reduced commission is negotiated into the offer, the seller’s agent will receive the FULL COMMISSION instead of splitting it with a buyer’s agent and you get no representation.
#2 A Buyers Agent knows how to make the best offer and negotiate when necessary
Since the Buyer’s Agent is only representing you, they will do their best to get you the right home and at the best price. In Seller’s Markets (when there are more buyers than homes available) and multiple offer situations are often seen, even the best agent cannot guarantee their client will win every offer.
However, a skilled Buyer’s Agent knows what questions to ask before making an offer. They can connect you with lender’s to help you make the best offer possible. If negotiations arise, they are still looking out for your best interest.
If you allow the Seller’s Agent to represent you, would your interests be put first in negotiations?
#3 A Buyer's Agent has connections to resources you will need during your purchase
Inspectors, attorneys, mortgage lenders, title companies…. there are so many moving parts to a real estate sale! Do you really want the Seller’s Agent making all these suggestions or referrals?
Again, use an agent whose only interest is your best interest…your buyer’s agent! They will suggest the people they are confident working (with which can often make or break a deal.)