I have recently had several people ask about buyer representation, so I thought I’d address the issue here at my website. The subject usually starts like this, “I am selling my home myself, but was considering having someone help me buy my new one.” I reply, “Having a REALTOR ® help you buy your next home is a wise decision and one that usually costs you nothing. You really have nothing to lose and in fact much to gain by having a REALTOR ® on your side. Just be certain the brokerage is truly representing you rather than the seller.” I would like to address this in a little more detail.
While I personally believe it is best to have representation on both sides of a home transaction, the selling end and the buying end, there is absolutely no reason not to be represented as a buyer. Some people choose to sell their home themselves to save money but having a real estate broker represent you as a buyer should not cost you anything in most cases.
Here are some common questions:
I see this agent’s signs at several of the houses I am interested in, wouldn’t it be easier to just call him or her and have them help me?
That agent would love you for that, but it is not truly in your best interest to do it this way. The listing broker represents the seller and has a long list of duties to that seller. A sample of these duties is to help the seller get the best price possible, to disclose some things and keep other things confidential, etc. They will be happy to help you since they will get the full commission if you are not represented by your own broker and they may even encourage you to do it this way but your full needs are not being represented in this type of arrangement.
Who is going to pay the broker that represents me?
The tradition in real estate has been for the seller to agree to a certain commission for the sale of their home. If the buyer has their own broker the selling side splits the commission with that other broker. Thus the seller pays for your broker representation.
Does that mean that any broker that helps me buy a home is representing me as long as they are not the one listing the home I buy?
No, not always. In fact years ago the tradition was that all brokers represented the seller. Thankfully, that has changed but many still think and practice this way. Today you can still have a broker that helps you find a home but is representing the seller’s needs rather than yours. In Texas this other broker is called a “subagent”.
It is best to have a written “Buyer’s Agent Agreement” which states that the broker represents you, the buyer. It will also state how this broker is to be paid. A few brokers insist that you, the buyer, pay their commission. Most, however, insist the seller cover their fees with the customary commission split. This is how we work and what I recommend to my clients.
Texas law requires all real estate licensees to give information about brokerage services to prospective buyers, tenants, sellers and landlords. It is important that you know your rights.
Bill Thompson, REALTOR®, e-PRO, Richardson, Texas
Website: http://RealtorThompson.com