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Old 10-16-2008, 08:28 AM
 
Location: Denver, CO
3,920 posts, read 7,197,033 times
Reputation: 1679

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Hi- I am getting ready to start the process of looking for my 1st home, I wonder if it is really more beneficial to work with a buyer agent as opposed to a "regular" agent. (Not a seller agent)
How to Buyer agents charge for their services? Do they get part of the commission of the sale? Do they really look out for your best interests?
Are they only interested in sales that they can make the most money on? as opposed to a home that the buyer can afford? are they less motivated to help someone who wants to buy a $100-150K home as opposed to a $200K+ home?
Please offer any insight to this, I'm ver intimidated about the home buying process, I don'r know anyting about it, plus I am female, so I worry about being taken advantage of or not getting ALL of the correct information.
I have started to read some home-buying book to try and get my questions answered, but applying them to a real-world situation might be different? Please help!!!
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Old 10-16-2008, 09:02 AM
 
Location: Cary, NC
39,024 posts, read 67,591,940 times
Reputation: 39920
Quote:
Originally Posted by sportsfangal View Post
Hi- I am getting ready to start the process of looking for my 1st home, I wonder if it is really more beneficial to work with a buyer agent as opposed to a "regular" agent. (Not a seller agent)
How to Buyer agents charge for their services? Do they get part of the commission of the sale? Do they really look out for your best interests?
Are they only interested in sales that they can make the most money on? as opposed to a home that the buyer can afford? are they less motivated to help someone who wants to buy a $100-150K home as opposed to a $200K+ home?
Please offer any insight to this, I'm ver intimidated about the home buying process, I don'r know anyting about it, plus I am female, so I worry about being taken advantage of or not getting ALL of the correct information.
I have started to read some home-buying book to try and get my questions answered, but applying them to a real-world situation might be different? Please help!!!
All good questions.
Here is a brochure we use in North Carolina to help folks understand the basics of agency. (http://www.ncrec.state.nc.us/pdf/brochures/WorkingwAgents-8.5x14.pdf - broken link)

All Realtors are agents. All agents are not Realtors. It is a voluntary association.
"Regular Agents" has little meaning.

Buyers' Agents represent Buyers.
Listing Agents represent Sellers.

You may live in a state where dual agency is allowed, wherein the agent works with both parties, favoring neither.

Your concerns about being shown homes that meet your needs are rooted in concerns about integrity and ethics of the chosen agent. You might do well to engage an agent who has a track record of first time home buyers, helping with affordable home purchases.

A good agent will work very hard to take care of your interests. That is one of the most rewarding aspects of the profession, helping folks avoid mistakes while achieving their goals.

A good agent will show you what is available at your price point. If the pickings are slim, and your description of needs does not match market reality, you may be shown more expensive homes, but that should be prefaced with a request for your approval.
If your wants and needs are totally out of step with what is available, then your agent should be straightforward enough to tell you so.

You also need to know if your agent will show you homes that are listed with other companies, or if they first have to show your their company's listings.

Commonly, the Buyers' Agent is paid by the Broker who has the listing, as compensation for bringing a Buyer.
Some Buyers' Agents may agree to a different arrangement with you.
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Old 10-16-2008, 09:08 AM
 
Location: Virginia Beach, VA
2,124 posts, read 8,403,341 times
Reputation: 816
Quote:
Originally Posted by sportsfangal View Post
Hi- I am getting ready to start the process of looking for my 1st home, I wonder if it is really more beneficial to work with a buyer agent as opposed to a "regular" agent. (Not a seller agent)
How to Buyer agents charge for their services? Do they get part of the commission of the sale? Do they really look out for your best interests?
Are they only interested in sales that they can make the most money on? as opposed to a home that the buyer can afford? are they less motivated to help someone who wants to buy a $100-150K home as opposed to a $200K+ home?
Please offer any insight to this, I'm ver intimidated about the home buying process, I don'r know anyting about it, plus I am female, so I worry about being taken advantage of or not getting ALL of the correct information.
I have started to read some home-buying book to try and get my questions answered, but applying them to a real-world situation might be different? Please help!!!
Hi Sportsfangel, I will try to answer your questions.

first the terms. Most Real Estate Agents can represent the seller or a buyer in a transaction. When they represent the seller, they are called the Listing Agent. When they represent the buyer, they are called the Buyers Agent and also the Selling Agent.

Your best bet would be to identify at least 3 agents that work the area you want to buy in, and ask to interview them. Plan to meet with them individually at their office. Tell them it will only be an hour, 30 minutes for them to present their services and recommendations and 30 minutes for them to answer your questions.

Some questions: you would like each of them to explain "agency" to you as it pertains to your state and how buyers agency will work for you. You would like to know what % of the commission they expect to earn. You want to know if there is a bonus will they pass that on to you towards closing costs etc. If you don't have a mortgage banker yet, will they make recommendations to you?

When you are done with that interviewing you should feel comfortable being able to choose one, and you will be better informed.

Now, is it worth it to have a buyers agent? Well, it doesn't cost you anything, so of course you want your own agent and definately you want them working as YOUR BUYERS AGENT. they will owe you fiduciary duties, accounting, CONFIDENTIALITY, and more.....

As to would they steer you to a higher home for more commission? Do the numbers. the difference in commission for a 150k home versus a 200k home is about $1500 (using a 3% commision split), which the agent splits with their broker... so maybe 750 dollars more. this agent will make more money off referrals from you for a job well done. Just as you will be getting referrals from your friends, co-workers and family as to who you will be interviewing.

good luck,

and ask ALL your questions here. No question is dumb or stupid....

shelly
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Old 10-16-2008, 09:19 AM
 
Location: Denver, CO
3,920 posts, read 7,197,033 times
Reputation: 1679
thank you MikeJaquish-(sorry for the misspelled words, btw!) I appreciate your info. I will have to ask the buyer agent more questions.
I want to have a payment of no more than 800.00/month, (1000.00 max) this includes PITI. the agent I was talking to says that this will get a home of less than 115K, does this seem correct? I've posted before and I've read that this could be more like a 150K home? (searching in Denver), and depending on rates an increase of 10,000 would cost 65.00 more a month, does this math sound correct?
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Old 10-16-2008, 09:28 AM
 
Location: Cary, NC
39,024 posts, read 67,591,940 times
Reputation: 39920
Quote:
Originally Posted by sportsfangal View Post
thank you MikeJaquish-(sorry for the misspelled words, btw!) I appreciate your info. I will have to ask the buyer agent more questions.
I want to have a payment of no more than 800.00/month, (1000.00 max) this includes PITI. the agent I was talking to says that this will get a home of less than 115K, does this seem correct? I've posted before and I've read that this could be more like a 150K home? (searching in Denver), and depending on rates an increase of 10,000 would cost 65.00 more a month, does this math sound correct?
I strongly suggest you shop for mortgage money before you start shopping for a home.
A good lender will give you solid information as to what you can handle.
Be aware, currently rates are trending up, and will have volatility due to economic conditions.

The agent sounds about right at $115,000 for the $800/month PITI figure. Of course, you can alter that with a down payment.
If you get into a condo or townhome, be careful that you know what the HOA dues amount is, and what you get for it. This is definitely part of your housing expense.

I wish I could help better, but from North Carolina, it is difficult since I don't know your taxes and insurance.
You need local help.
Don't be afraid to speak with a few agents, too.
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Old 10-16-2008, 10:25 AM
 
Location: Denver, CO
3,920 posts, read 7,197,033 times
Reputation: 1679
thank you shellytc- these are awesome questions, I found out that i may be limited in my choices for buyers agents, as there are only 2 I think in my area, but I will interview them anyway. this is a big decision for me and I want to do it right, and have all of my options available.
is it a bad thing if I used an agent who represents both? does this type of agent have their own list of sellers, or do they automatically represent the seller of the actual property I am looking at? (does this question make sense?)
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Old 10-16-2008, 10:28 AM
 
Location: Denver, CO
3,920 posts, read 7,197,033 times
Reputation: 1679
thank you Jaquish-i will do that!
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Old 10-16-2008, 12:33 PM
 
Location: Virginia Beach, VA
2,124 posts, read 8,403,341 times
Reputation: 816
Quote:
Originally Posted by sportsfangal View Post
thank you shellytc- these are awesome questions, I found out that i may be limited in my choices for buyers agents, as there are only 2 I think in my area, but I will interview them anyway. this is a big decision for me and I want to do it right, and have all of my options available.
is it a bad thing if I used an agent who represents both? does this type of agent have their own list of sellers, or do they automatically represent the seller of the actual property I am looking at? (does this question make sense?)

I'm not sure I completely understand your questions... so i am making a guess.

You are concerned that your buyers agent may also represent the seller? Just tell your buyers agent you don't want to see any of her/his listings. But definately discuss that during your interview process. that would mean that you do NOT want an agent to practice dual agency. If there is a property that you would be interested in that he/she has listed, you would like them to refer you to someone else.

shelly
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Old 10-16-2008, 01:42 PM
 
Location: Denver, CO
3,920 posts, read 7,197,033 times
Reputation: 1679
what I mean is this: I use an agent who represents both buyer and seller.

this agent has 3 sellers as clients.

I come along and see a house for sale at 123 main st. if this house is not one of the 3 clients already working with the agent, does the agent then represent this new seller at 123 main st? or just represent me as a buyer?

maybe I'm not asking the question correctly. when an agent represents both buyer and seller, so they do this for EVERY property shown?

oh- I think I might be answering my own question?!
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Old 10-16-2008, 03:33 PM
 
Location: Virginia Beach, VA
2,124 posts, read 8,403,341 times
Reputation: 816
Quote:
Originally Posted by sportsfangal View Post
what I mean is this: I use an agent who represents both buyer and seller.

this agent has 3 sellers as clients.

I come along and see a house for sale at 123 main st. if this house is not one of the 3 clients already working with the agent, does the agent then represent this new seller at 123 main st? or just represent me as a buyer?

maybe I'm not asking the question correctly. when an agent represents both buyer and seller, so they do this for EVERY property shown?

oh- I think I might be answering my own question?!
Ok, lets see if I can explain...

Agent one has a property listed. they are the listing agent.

You have an agent, they take you to show you the property.

Seller is represented by their agent, you are represented by your agent.

Seller pays the listing agent an agreed upon commission amount. Listing agent shares that commission amount with selling agent.

Your buyers agent will show you whatever homes you want to see, listed by any other agent.

does that answer your question?

shelly
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