Not One Dollar More - Joseph Cummins
"Your goal should be to engage an agent who will represent only your interests. Not just a 'buyer broker' but an Exclusive
Buyer Broker. Make sure that is what you are getting."
Is 'your' agent really working for you? Christopher Cruise
"You wouldn't -- for a lot of good reasons -- go into a contested divorce proceeding without an attorney, or worse, take the advice of your spouse's attorney."
"Why, then, would you buy a home -- an adversarial process regardless of how friendly everyone involved in the transaction seems -- without someone on your side?"
"Oh, you think home buyers have always had representation? Well, think again."
"As a buyer, you are not represented unless you've told the real estate agent who is showing you homes that you want that agent to represent you as your "buyer agent." If you haven't, "your agent" could be representing the seller. "
(Full July 2003 text - click here)
"Real estate and housing is one of the least consumer protected areas in our country and buyers overpay for housing by more than $10 billion due to poor representation."
(Full August 1998 text - click here)
BUYING A HOME-The
Buyer Broker -You Bought It
"Even though a traditional agent may spend hours and hours with you, her allegiance isn't to you at all. It's to the seller, and in this regard her main motivation is to get as much money out of you as possible. There are two reasons for this. One, it makes the seller happy to get a lot of money. Two, as we've seen, the agent's commission is based on a percentage of the selling price. The more you pay, the more she makes."
"There are many agents who will take exception to looking at their business so coldly. And there are many fine and ethical agents in the world. But the bottom line is that sellers' agents are salespeople who make their living off commissions. Never forget that, no matter how nice they are."
"So how can a good Fool make sure that the guy who is helping him is really helping him? By hiring a "buyer broker" instead."
"...Find an agent that works for you. Most work for the seller, so be careful what you say. Your best shot, you'll get the surest representation, from an exclusive buyer's broker." March 1996
Buying A Home - Elizabeth Razzi
"Exclusive buyer's brokers work only with buyers and don't take listings. They're obliged to help you find the best deals and lowest price." Unfortunately, agency standards have changed so much in the past ten years that real estate agents themselves are likely to be confused about their obligations to buyers and sellers, even though in most places they are supposed to give you a disclosure form explaining your relationship. Bottom line: You don't truly have an advocate in your corner unless you both sign a contract saying so."
Strategies for Buyers - April 1998
"The last thing you want to do is walk into an open house and start blabbing how much you can afford to the agent who has listed the house. That agent owes his or her allegiance to the seller--and only the seller. If you're negotiating with a pro, you ought to have a pro in your corner, too. Get an advocate on your side. It's commonplace now for buyers to sign up their own agents to represent their interests in a deal. Look for a buyer's broker who will represent you--and only you."
"Exclusive agencies are the best. They remove any conflict of interest, which is the main reason for considering a buyer broker in the first place."
HOME BUYING- Choose a Broker
The last thing you want to do is walk into an open house and start blabbing how much you can afford to the agent who has listed the house. That agent owes his or her allegiance to the seller -- and only the seller. If you're negotiating with a pro, you ought to have a pro in your corner, too.
It's commonplace now for buyers to sign up their own agents to represent their interests in a deal. Look for a buyer's broker who will represent you -- and only you.
"...Buyers average a 5% savings when represented by a buyer's agent rather than a seller's agent."
"...Unlike the traditional agent who looks out for the seller, the buyer broker acts as your advocate, helping you find the home you want and then negotiating the lowest price."
"...The best buyer brokers are so-called exclusive agents - that is they represent only buyers, never sellers, and thus are not tempted to push a house on which they stand to earn a commission." May 1995
House Hunting? Save By Hiring Your Own Broker - Carla A. Fried
"If you ever doubted the value of real estate agents who work solely for home buyers (as opposed to traditional agents who report to sellers, consider this: A recent study by U.S. Sprint found that 232 relocating Sprint employees who hired buyer's brokers paid an average of 91% of a home's list price. People who use traditional agents typically pay about 96%. On a house originally priced at$150,000, that's a difference of $7,500."
"Exclusive buyer's agents work only for consumers and often can save them money--and they don't cost more to hire...Buyer's agents are not tied to any particular property or agency, so they will show buyers any home, even those for sale by owner."
Putting the Real-Estate Agent on the Buyer's Side
"Home-buyers may not realize that the friendly real-estate agent who has shown them through dozens of homes and shared their secrets is legally obliged to use that information to help get the best possible price and terms for the seller."
"Groups such as the Consumer Federation of America and AARP recommend using buyer's agents...The reason is that they work."
"Confusion often arises because many buyers believe that the agent who shows them houses works on their behalf. In fact, subagents of the listing broker - often they are agents who work for another office - also act on behalf of the seller."
"To Buyers: If you want representation, work with a buyer broker. They are legally obligated to represent your interests in any negotiations with sellers."
"Buyer advocacy appears to be taking off."
"I'll never buy a house any other way."
"Until recently, all residential real estate agents and brokers represented the sellers, a fact lost on many home buyers. Now...a new breed of brokers has emerged to fend for them."
Agents: How to hire one for your side.
"...Most agents who show you homes don't represent your interests. They work for the seller and their object is to sell the house at the highest possible price."
"...Always remember that a real estate agent does not work for you, but for the seller, If you want an agent on your side, hire a buyer broker."
"...Anyone buying real estate should use a buyer's agent."
"...Buyer brokers will better represent the interests of buyers than will sub-agents. They are more likely, for example, to negotiate a lower sales price on a house."
"Buyer brokerage is becoming accepted. Unlike traditional real estate arrangements, under which the agent works for the seller, buyer brokers work for the buyer."
"When buyers do not use an exclusive buyer broker, they are generally dealing with a professional, trained selling agent who has pledged to get the best price and terms possible for the seller. The better option is to contact a national buyer broker network."
"Many people don't realize that unless stated otherwise, brokers are legal representatives of sellers. A buyer's broker, representing only the buyer, may be able to secure a better price and better terms."
"...Buyer Brokers: agents that buyers can call their own."
"...If your real estate agent isn't a buyer broker, he works for the seller."
"...Buyers no longer have to fend for themselves."
"U.S. Sprint Communication Co., encourages the 700 to 900 employees it transfers each year to find a buyer broker to handle their home purchase. Home buyers who use buyer brokers are able to slice more off the price of a home."
"...the buyer's best protection is to hire a buyer's agent."
"Level the playing field when you buy a home...You may get a better deal with your own broker pulling for you...The introduction of buyer brokers takes a horribly one-sided process and simply makes it fair," says one broker."
"Buyer brokers have the buyer's interests in mind. They act as a personal advocate, hunting for the right house and haggling with the seller's agent. In fact, a 1992 study by a national long distance phone company, found that 200 relocating workers who used buyer brokers paid an average of 91% of the offering price, whereas those using traditional brokers paid 96%."
"To protect themselves buyers can retain their own exclusive representative, called a buyer broker...Your local agent may offer such services, but be aware that buyer's brokers who also work as seller's brokers can sometimes end up on both sides of the deal."
Real Estate Agents: Get Your Money's Worth
Maureen F. Glasheen
"As the FTC noted: 'many buyers run several risks. . . if they identify as their broker a person who is not in fact intending to act as their agent.' For example:
A buyer may 'reveal information he or she might otherwise wish to keep confidential' because such information would help brokers working for the seller in obtaining the highest price for a home.
A buyer may believe a broker is 'scouring the market'. . . as a representative, when, in fact, he or she is picking out those properties. . . which both meet the buyer's criteria and which also will bring in a large commission. . .'
A buyer may assume that the broker will use his or her expertise to discover defects in a house, when without a contractual agency relationship, the broker may feel he or she has no duty to do so."
"Survey data from the study revealed that, in many transactions, sellers were informed by agents about how much buyers might be willing to spend, while most buyers expected such information would not be revealed."
"Such double dealing can also work against sellers if their agent isn't protecting their interests, but seeking simply to close a deal. For example, sellers can be required to refund the buyer's money if the seller's agent (or subagent) misleads the buyer about the nature of their relationship or facts about the house."
"Many large firms have indulged in the lucrative practice of 'in-house sales' in which only one company is involved in listing the property and producing the buyer. In other words, the same company acts as the seller's agent and buyer's agent in the same transaction to pick up the 6% or so set aside to pay two agents. Recent laws passed in Texas, Georgia, Illinois, Minnesota and Colorado would appear to minimize broker liability for this 'double-dip.' "
"You should begin by asking yourself whether you need an agent at all. If you cannot take care of yourself in a business transaction, then it is money well spent to have a loyal agent of your own."
"Nevertheless, until the industry gets used to old-fashioned rules of loyalty, you should remember that you are the boss in this market, and you set the terms of employment. When you engage a broker or attorney to act as your agent, you should look for companies that subscribe to a 'single agency' policy or 'exclusive buyer agency' policy. Steer clear of companies that offer disclosed dual agency as a policy. Remember, the first question you should ask your broker is: 'whom will you represent?' "
(Full text - click here)
Smart Money: A Personal Shopper For Your Dream House - Pam Black
"When Sallye and Jim Ryan wanted to move from their Tampa apartment to a three-bedroom home this spring, the busy couple used a buyer broker, Beth Tansey, to help. Within a week, they had bid on the house they now own. Sallye liked being able to delegate the house-hunting. "With both my husband and me working, it was a lot easier," she says. "I don't think I would have found this house that I really love without her. There are so many homes for sale here, I would probably still be looking."
"Because Tansey is a buyer broker, who exclusively represents the home buyer's interests, the Ryan's trusted her to find the best deal on a house that suited their needs. By contrast, a traditional real state broker is legally bound to work for the seller who pays the commission and therefore may be more intent on selling listed homes than finding your dream house. Even Realtors who don't hold the listing on a given house act as subagents to the seller. So unless a broker says that he or she is working for you -- brokers are now legally obliged to disclose who they represent -- you can assume the broker is working for the seller. Such agents must pass on information such as the buyer's income to the seller, who then has a better idea of what price to hold out for."
"Because these brokers are obliged to get buyers the best deal possible, they approach houses with a critical eye for apparent flaws. You'll still need an inspector to uncover hidden defects, however.
Buyer brokers also show properties sold by the owner, which can be cheaper because the only commission is what you agree to pay your broker. Sellers' agents usually won't show these homes because they don't make commissions on them."
"Brokers representing buyers should also appraise the value of the house, negotiate the price, and pre-qualify you for a mortgage, sometimes at a better rate. Buyers' Agent brokers, for instance, narrow mortgage bids from 15 lenders nationwide to the three best offers -- and then get those three to rebid. 'A well-trained, experienced buyer broker is a great asset', says Peter Miller, author of How to Sell Your Home in Any Market ($12, Harper Perennial) and other real estate guides. 'You won't do any worse, and you may do a lot better.' "
"Usually, the buyer broker splits the sales commission with the seller's agent, just as a subagent who didn't have the listing would with the broker who did. So the fee still comes out of the sale price. Some people might assume that buyers' agents have an incentive to keep the price high. But again, the broker must get you the best deal. 'In my experience, all of them do', says Stephen Brobeck, executive director of the Consumer Federation of America."
"A conflict of interest is more likely when a real estate firm that represents sellers assigns you one of its brokers as a buyer agent. That's why many people believe an 'exclusive' buyer broker is preferable. If there aren't any in your area, and you have to use a listing broker, 'make sure they disclose when they are showing you properties they have a financial interest in', says Brobeck."
Differences in brokers are crucial
Jane Bryant Quinn
"Responding to growing consumer preference, real estate brokers are making their industry more hospitable to the `'buyer's broker'. That's a broker who works exclusively for the person who's looking for a house. Traditional brokers work for the seller, even though they show buyers around. `'Dual agents' claim to work for both of you, although many agree that's not possible."
"The differences are crucial. A broker who works for the seller is duty-bound to negotiate the highest possible price for the house. Buyers often don't realize this. As you chat in the broker's car, you may disclose which house you love and what you'll pay in order to get it. That information goes straight to the seller, undermining your bargaining position."
"A buyer's broker, by contrast, works for you. He or she is bound to keep your confidences and negotiate with the seller for the lowest possible price."
(Full text - click here.)
"Finding the right house usually means first finding a good real estate agent. That's the focus of
Buyer Beware! Author Carla Cross candidly reveals many secrets of the business to help buyers avoid being buffaloed by lazy, incompetent, or unethical practitioners. That may happen surprisingly often; one-third of all homebuyers say they would not use their agents again, according to an industry survey. Cross tells how best to screen and choose an agent, and advises buyers to hire their own agent, or
Note: Emphasis added by BUYER'S ADVISORS.