Purchasing real estate is a complicated and time-consuming process. If you choose to move forward without a real estate agent’s assistance, you risk taking on hours of work researching properties, scheduling tours, and negotiating a purchase agreement. Few people have the ability and resources to become a local real estate market expert an industry expert in several months.
The real estate agent specializing as a buyer’s representative is someone poised to act as your guide through the home-buying process. A real estate deal can go haywire at multiple points, from securing buyer financing to a potential home failing inspections.
Real estate agents have seen it all. We once had a car collide with a client’s home. Trust us: even without those types of unusual events, the journey from finding a home to close is perilous. Real estate agents have a plan for tackling any obstacles in your home-buying journey.
But there's much more that a buyer's real estate agent will do for you. Let's dive deep into why you need a buyer’s agent when purchasing your home.
What real estate agents know
It doesn't matter if you're a first-time home buyer or buying your sixth house, chances are you don't deal with residential real estate day in and day out.
The best real estate agents are physically walking through homes every day of the week. This experience has taught them what to look for when buying a house.
Not every buyer is aware of certain red flags that indicate a greater problem. But someone examines houses all the time knows when a crack under the windowsill is a minor issue or if a disaster might lie behind those walls. Buyer’s agents know when to double check that seller’s disclosure for a potential problem or to advise their clients to be careful when moving forward with the property. Some agents are so experienced they can tell you about the home builder’s history and what special measures that particular builder works into their properties.
Besides gaining knowledge about homes, real estate agents spend lots of time studying real estate law, zoning, negotiation tactics, and so much more. They research current trends and know where the market might be heading. A buyer’s agent will tell you if a property might be a good buy given the current conditions or if you might be served waiting a little before searching on that dream home.
New laws and legislation impact everything from insurance to the transaction process. For example, a recent change to Texas law impacts flooding disclosures during the real estate transaction. Real estate agents stay abreast tracking of federal, state, and local legislation to know how the changes impact their clients.
Most importantly, real estate agents learn to work with people. It's often the relationships they have earned that help in securing the deal. Real estate agents are a network. They learn what strategies work best with the seller's representative. They nurture contacts that earn them exclusive access to pocket listings that fit your dream home description. It’s their network that might get you in the door before a property even hits the MLS.
Bottom line: Google is helpful, but there are real estate street smarts you can't learn from reading a book or searching the internet.
How it works with a buyer’s representative
While a buyer’s agent will save you time in your home search and money on the transaction, it's hard to quantify their full value. Here's how the real estate process generally works when you hire your buyer’s real estate agent.
#1- Initial meeting
During this first meeting, the real estate agent will ask many questions to determine how much home you can afford, how far along you are in securing financing, and your housing needs and wants. An agent will educate you on the current market, especially if you have a specific neighborhood you are interested in calling home. They know if your expectations match your needs and wants. Should these wants be misaligned with your target neighborhood, they’ll know and offer alternative suggestions.
A buyer’s agent uses this information to design a strategy to find you the perfect home.
#2- The buyer’s agent contract
Before they get to work on your behalf, the agent will ask you to sign a buyer’s agent agreement. This lays out the terms of hiring them, such as their commission, the length of the contract, and an exclusivity clause. Read more about the clauses and justification for signing a buyer’s agent agreement.
#3- Setting up tours
The buyer's agent will coordinate with you and sellers to tour available properties. They’ll discuss the different details related to the home, it's selling point, its proximity to neighborhood amenities, and other pertinent facts. The agent acts as your filter, finding homes within your budget that best match your needs.
Once you land on a home you'd like to submit a purchase offer, the buyer's agent will advise you about the contract. The agent will discuss the contingencies you may want to add, how much to offer, and how much time to give the sellers to think about the purchase agreement. They serve as your voice in the negotiation process. Expect to hear back with seller counter-offers, and gain the agent’s feedback on if the changes are reasonable.
Sometimes properties end up in bidding wars. Your agent will give advise to position you as the winner of the multiple-offer scenario. And if negotiation fails, they’ll be your shoulder to fall back on. The home buying process is emotional and buyer’s agents know that. Lean on them when the going gets tough.
#5- From offer to close
Between having a signed purchase agreement and the actual close of the deal, the best buyer’s representatives continue to stay in touch about the transaction progress. There's a lot to be accomplished during this period, even if you're bringing an all-cash offer. Chances are the property needs home inspections, paperwork for the lawyers to review, paperwork to be filed with the city, title checks, and more. The buyer's real estate agent wants your deal to close at the appointed time. They have a system in place for tracking all the boxes needing check marks before close.
Buyer’s agents want you to love life in your new home. The best representatives think beyond the deal. Especially if you’re moving into a city for the first time, the buyer’s agent is your local resource. They’ve nurtured a network of diverse contacts and will give your recommendations on vendors. This includes everything from moving companies to title companies to professional painters. Even after the close, feel free to call for advice on interior designers or remodeling companies.
A buyer’s agent special duties
By far the most important role buyer’s agents perform is due diligence on the house their clients wish to purchase.
Buyer’s real estate agents foremost duty is to protect their clients. It's their mission to make sure everything about the home checks out, from the permits for past renovations to its zoning. They review the seller's property disclosure statement, the comprehensive loss underwriting exchange (CLUE) report, and the title report with their educated eyes. Anything that looks like a concern, the real estate agent should point out to you as a matter of protecting you.
Home owners are notorious for not getting building permits for remodeling work inside their properties. This can cause big trouble when it's time to sell a home. Hopefully, the seller's representative caught these issues before listing the home, but that's not always the case. A buyer's agent should do deep research on the property, especially if they suspect permits have not been pulled.
It's also a real estate agent's job to make sure the buyers do not overpay for their purchase. As a home buyer, you're going to live with what you pay for years to come. It's important that number is reasonable for you and the seller.
Real estate agents provide their clients with comparable data on other similar properties. They partner with you to come up with a reasonable value for the interested home. A buyer’s agent will save you money because they want to secure you the best price for the property.
Another significant duty is the writing of the contract. A buyer's agent knows how to structure the purchase contract in a way that represents you in the best possible way to the seller. An incomplete purchase offer or one with blank areas gives a seller reason to reject your offer.
Sure, there are real estate contract templates out there, but due diligence requires real estate agents don’t trust in the template. Writing contracts is an art. Real estate agents study the in and out of real estate contracts. They know what the contingencies should say to protect their clients. People sometimes sneak things in that shouldn't be there. Real estate agents know where to look to cover their clients.
Another duty is navigating all the problems that pop up before closing. If the appraisal comes in with an issue, the agent will discuss how to get the appraisal adjusted or perhaps help negotiate a new sales price.
The buyer's agent wants to keep the transaction on schedule. The agent maintains connections with the lender, will help review the loan documents, and will discuss any additional documents that might cause closing delays.
A delay in the closing frustrates everyone, not just the buyers. For those applying for financing, a setback could mean losing their locked-in interest rate. Most mortgage lenders will rate lock for 45 days, which from a real estate transaction point-of-view gives buyers little wiggle room for an obstacle.
Good buyer's agents know how real estate transactions can be delayed or fall apart. They take steps to avoid anything that shifts the closing date. They have systems in place to organize the transaction from the purchase offer to the closing table.
Picking a specialized buyer’s agent
Not all real estate agents are created alike. The industry is known for specialization. Even among buyer’s agents, there's even more specialization.
The most critical step when selecting your buyer’s representative is making sure the real estate agent has experience closing real estate transactions in your target neighborhood. Their understanding of the local market could mean thousands of dollars in your purchase price. Someone who has been in and out of the local homes knows when something is a good deal or when a home has a particular feature that makes it worth more money.
Another example of this would be someone who specializes in buying rural residential real estate. Land and Ranch properties have some different concerns from buying inside a city like Fort Worth. In addition to the normal inspections, rural properties benefit from getting the local well tested for bacterial and contaminants, a septic inspection, and review of special covenants, restrictions, or specific use needs on the land. You can see why it makes sense to hire a buyer's agent specializing in land and ranch residential real estate for this type of purchase.
Other particular specializations include buyer’s agents for condominium properties or agents working with real estate investors.
Understanding the fee structure
The best part of hiring a buyer’s real estate agent is most likely it will cost you nothing. Many agents do all of this work for you without a guarantee of payment.
The majority of buyer's agents are paid after the deal closes. The seller typically pays a real estate commission, which is split between the buyer's representative in the seller’s representative. The split breaks down further between the brokerage and the actual real estate agent.
There are some exceptions to this typical way of doing business. Some discount brokerages or alternative real estate agents might require a fee in addition to or in place of the real estate commission. Others use a pay-as-you-go type of arrangement where you only pay for the services that you use. The drawback to using this kind of service is you're going to probably pay for their hours even if you end up not buying a home from them.
What it will cost you personally? The answer lies in the buyer agent agreement. When you interview your real estate buyer's agent, ask to see a copy of their contract. Read the fine print about how they accept payment for services rendered. Chances are, it’ll be free for you.
Hire a buyer’s agent
The point of hiring a buyer's representative is having a neutral party looking out for your best interests. You make it more likely that you will find the right home for you and your family without busting your budget when you hire a buyer’s real estate agent. It's well worth saving you time and money to find the right person equipped to find you the right deal.
The Chicotsky Real Estate Group is committed to providing exceptional buyer’s representation no matter your past experience buying real estate. As leading Fort Worth real estate agents, we have intimate knowledge of the city’s neighborhoods and have nurtured a network of contacts. Our goal is to assist you with all your real estate needs, from your first home to your last.