Use an Exclusive Buyer’s Agent, Not a Listing Agent, to Buy a Home

When you are selling your home and looking to buy another in the same area, never use your listing agent to represent you in the purchase of your next home! (Even if they claim to be a buyer’s agent.) OK, that’s a little strong and there may be some exceptions, BUT there are some pitfalls to avoid and some problems to consider.

use an exclusive buyer's agent when buying a homeAgents who list homes are salespeople. Their job is to sell their listings for the highest price and best terms for the seller. Of course, there is a conflict of interest when you are the seller and they are bringing you a buyer from their company, or worse yet, their own buyer. But they most likely went over all that in their listing agreement, enough to give you some level of comfort to move forward with them despite a potential dual agency.

Hopefully you haven’t been trapped into signing a Buyer Agency agreement with them when you listed your home with them. It makes a lot more sense to see if you really like them in action before giving them both the selling and buying side of your transaction up front. If your listing agent is a good one, you will probably bond with them and increasingly feel more and more comfortable with them, enough to have them help you look for your next home. I’m suggesting that’s not a good idea.

So what’s wrong with it? It seems natural enough and the easy way to do it. But, is it what’s best for you? Think for a moment about how effective your agent has been as a sales person. The more skilled they are in sales, the less likely they will be to switch gears to work as a consultant, counselor, investigator, and advocate for you as a buyer. It’s a matter of orientation.

What an Exclusive Buyer’s Agent Would Do

Sales agents are geared for sales. That’s their expertise. And it will really manifest itself when they first start showing you their company listings. And, how many homes For Sale By Owner will they show you? Or how about those pesky “entry only” listings? Wouldn’t you like to know about all houses for sale within and outside the Multiple Listing Service? That’s what an Exclusive Buyer’s Agent would do.

But it goes beyond the depth and breadth of properties they show you. How much investigative work will they do? Do they know the questions to ask and how to find the answers during negotiations? Will they have the time to do all that while they’re trying to sell your home as well as all their other listings? What happens when they are negotiating against a good friend and colleague in their own office or company?

There’s a lot of inherent conflict. Even when it comes to compensation there will most likely be a conflict. When acting as your buying agent, if their “commission” is based on a percentage of the sale price, it’s a conflict of interest. The more you pay, the more they make. Yet their job was to get you to pay less?

As an Exclusive Buyer’s Agent, I prefer to make less when my buyer has to pay more for a property. That’s more in harmony with my job of getting my buyer the lowest price and the best possible terms. Our compensation agreement will reflect that.

The Smarter Way to Buy and Sell Your Next Home

A smarter way to sell your home and buy your next is to have a specialist on both ends. Have an individual or team totally focused on marketing and selling your home. Have another individual or team totally focused entirely on locating, evaluating, and negotiating your next home purchase. And if the Buyer’s Agent never lists property and works solely for buyers you’ve got a focused, experienced, and dedicated Buyer’s Agent.

When you want to sell your home, use a good listing agent. When you’re ready to buy your next home, use an Exclusive Buyer’s Agent.

Does that make sense? I’d love to know what you think or what your experience has been. Use the comment form below to let me know.

The Benefits Of Working With A Buyer’s Agent

The Benefits Of Working With A Buyer's AgentThe purchase of a home is, in the majority of cases, the single most expensive and complicated transaction a person will ever experience. On top of that, people typically only have the experience one, two, or three times during a lifetime, so they never get accustomed to the process. Also, requirements for a real estate transaction changes over the years. Because of this, there are many benefits of working with a buyer’s agent who can successfully guide, advise, and navigate the path to home ownership.

A buyer’s agent utilizes their knowledge of the real estate market to help their client acquire their home. By using years of first-hand experience in the home buying trenches, the buyer’s agent offers advice on fair market value, how to best negotiate all the terms, and how to complete all of the necessary documentation. This experience is extremely valuable given all the possible variables in real estate. And, as a typical home buyer, this is experience that is impossible to gain in just a couple personal transactions.

There are literally hundreds if not thousands of possible pitfalls in a real estate transaction which must be navigated. An experienced buyer’s agent will be able to walk you through episodes that just might include the following:

  • The seller did not make the agreed upon repairs.
  • The seller is out of town and cannot be reached and there is a fire hydrant in the middle of the driveway that must be moved.
  • There is a heavy rain and there is water in the basement the day before closing.
  • The buyer makes a large purchase prior to closing and no longer qualifies for the mortgage.
  • There are multiple out-of-town owners on the deed and they must all sign closing paperwork.
  • The home is offered as a short sale and it takes six months to be approved.
  • The home is a foreclosure and the bank is difficult to reach.
  • Termites are found.
  • The seller’s agent is not communicating well, causing information to lapse or not be conveyed to the seller.
  • The buyer moves in and discovers damage that was not disclosed.
  • They buyer’s funding is delayed so the closing and possession dates must be adjusted.

And this is just a short list; it could go on and on. The role of the buyer’s agent is to manage the transaction, providing solutions to each of the problems and minimizing stress for the buyer by keeping their client informed. The benefit of working with a buyer’s agent is to have a professional facilitate the purchase of one’s largest asset.

During a real estate transaction, there are many different service providers a buyer must contend with. You will at least have to deal with the mortgage company, the seller’s agent, one or more title companies, the buyer agent’s broker, the appraiser, the inspection companies, and various repairmen. If any one of these providers drops the ball, the closing may be delayed or even canceled.

A good buyer’s agent will have systems in place to manage and track the progress of each of step of the purchase, all the while keeping their client, you, informed.

Interview several buyer’s agents and choose the one who gives you a concise, well-laid out plan from start to finish. A good buyer’s agent will have your best interests at heart to make your home buying experience a success.