Buyer Brokerage. Is it for you?

Many of you may have heard the term "a buyer's broker," but just what does that mean, and how does it impact you when buying a new home?

Let me begin by explaining the traditional way first. When you enter a Realtor's office, you should be asked to sign a disclosure form. This explains to you exactly who the sales representative is working for. It is generally the seller.Any information you give to your agent that would help the seller decide if you are the right buyer for their house, should be relayed to the seller. It is that agent's job to get the highest possible price and best terms for the Realtor's client, who is the homeowner. However, you are owed fair and honest treatment.

If you decide to hire a buyer's agent, you now become the client. The Realtor is working in your best interest. It is their job to get you the best possible price and terms. Other benefits of the buyer's broker would be finding more houses. Now they can search for all the For Sale by Owners for you. They can also show you houses that have failed to sell, find you builders, and anything on Muliple Listing. They can point out defects, environmental issues, what things might affect your reseale value. Buyer's broker's can even do a market evaluation on the house you intend to buy, to see how it holds up to other houses in the area.

But, who pays the commission? Again, traditionally, the seller pays the brokerage fee, which by the way, comes out of the mortgage you pay for. But the commission can be paid by anyone. We could get the fee from the seller or the cooperating brokerage, after all, they would have paid out a commission any way! Or, you as the buyer could choose to pay the fee.

If you are choosing a buyer's broker, make sure they have had the proper training in this area. However you decide, always remember to pick a reputable Realtor, one you have confidence in, and one you trust. And have fun! That new house is just around the corner.

Agency Relationships
Licensed real estate agents are required to disclose who the represent. In most cases, the Agent and Subagent represent the Seller. 

Some of the duties of the Agent for the Seller are to:

• Promote the best interest of the Seller.
• Obtain the best price and terms for the Seller.
• Offer the property without regard to race, color, religion, sex, national origin, familial status and handicap.
• Treat all parties to the transaction honestly.
• Fully disclose to the Seller any and all facts which might effect or influence the Seller's decision, including information about the buyer.

The Buyer may choose to employ a Real Estate Broker to represent his or her interests as a Buyer's Agent, and if so, should enter into a written contract that clearly establishes the obligation of both the Buyer and the Buyer's Agent and specifies how the Buyer's Agent will be compensated.

Some of the duties of the Agent for the Buyer are to:

• Promote the best interest of the Buyer
• Obtain the best price and terms for the Buyer.
• Offer the property without regard to race, color, religion, sex, national origin, familial status and handicap.
• Treat all parties to the transaction honestly.
• Fully disclose to the Buyer any and all facts which might effect or influence the Buyer's decision

Buyer's Options
Real estate is sold in its present condition. It is the Buyer's responsibility to satisfy himself or herself that the condition of the property is satisfactory. The Buyer may request that the property be inspected at the Buyer's expense by a qualifies professional (engineer's report) to determine the condition of the structure or its components.

The Buyer's request for an inspection should be make prior to the Buyer's entering into a contract or sale. The purchase of any property will be as a result of inspections made by the Buyer and/or qualified professionals hired by the Buyer and not as a result of any representation made by the seller, the sellers agent, the buyer's agen or their respective salespeople, employees, subagents or partners.

For your convienence, please take a look at the document I have prepared for you showing a chart of the steps of the purchasing process here.

What happens after you offer is accepted...

You've been very busy looking for the right property. You've worked with your agent to negotiate a successful purchase. You may have been talking to your agent daily. But, after you purchase, most of your intense work is over, and other professionals - specialists in processing and closing your loan - step in. I've created a glossary of terms to define various responsibilities and commonly used terms. They are:

Your Loan Officer - Explains loan programs, qualifies you for a loan of your choice, takes your loan application (Done before we start!)

Your Loan Processor - Verifies your sources of funds, income, orders appraisals, credit report, sets up escrow. (Done as soon as your loan is applied for)

Your Loan Closer - The escrow agent holds documents and funds on behalf of the buyer and seller. As a "disinterested third party," the escrow agent distributes all funds according to the buyer's and seller's instructions.

Your Buyer's Agent - checks regularly with all parties to assure your process is orderly; acts to anticipate any potential problem and notify parties to make corrections.

So, after you've successfully negotiated the purchase of your home - relax. These professionals are paid for their work through closing costs and commissions. Their jobs are to assure all the paperwork is processed, and that your best interests are kept in mind. Your job is to get them the information they request from you in a timely manner, so they can process all the paperwork within the required time frames.