Many Buyers ask the following questions:
Why should I work with a Buyer's Agent?
How will it benefit me?
How is it different from working with the Listing Agent?
What is procuring cause?
Many people don't understand that it doesn’t cost the buyer a fee to use most realtors, me included. This means that you can have a Buyer's agent represent you through the entire process at no charge to you. Some realtors try to charge buyers for their services – if you run across that, my recommendation is to find another realtor. Sometimes Buyer's agents will try and charge their clients a $295.00 fee that is associated with all Buyer's agent contracts. In my case, this fee is paid by me instead of passing it on to you, the buyer. Outside of this up-front fee (which again, I pay for you), you’ll find that the cost of a Buyer's agent is automatically built into the seller's costs. Here is how: If a seller uses a realtor to list their home, they have agreed upfront to pay the realty company a set % of the sale price of the home. Upon final sale of the home, that % is then split between their seller’s agent (representing them) and your buyer’s agent (representing you). If you don’t use a Buyer's agent, the Listing agent gets the full %. Therefore, the seller pays the same commission, you pay the same amount for the home, but you have no representation through the process (unless you pay the additional costs for a lawyer).
Also, and this is very important: If you look at or call about a listing without first contacting a Buyer’s agent, the agent who showed you the house (or provided info) is considered "procuring cause", and therefore you may be obligated to work with that agent if you want to buy that specific property. A past client of mine wanted to work with me to write an offer on a home they had called about by contacting the listing agent directly. Because the listing agent had spent 20-30 minutes providing them with information and/or showing the property, this person was forced to work with that listing agent…that listing agent got the full % after the sale of the home and this person couldn’t use me as representation as their Buyer’s agent. For you are interested in Buyer representation, it's best to choose the Buyer agent you feel comfortable working with before looking at homes.
Note: The one situation where having a Buyer’s agent may cost you is if you buy a home that is listed FSBO (For Sale By Owner). At this point, the seller is selling the house themselves, trying to avoid paying the set % to both the listing and the buyer agents. If you try to buy a home FSBO, the situation changes where you and the seller have to decide how to pay the buyer’s agent…most of the time (especially in the Madison market right now) the seller will pay the 3% commission, since they’re still saving 3% (by not paying a listing agent). They’re typically happy to do this because now the Buyer agent will be responsible for doing all the paperwork & organization of inspections, property condition reports, loan info, etc.
If you want an Agent to work on your behalf, choose a Buyer Agent to represent you before you begin your home search.
Don't lose the chance of having Buyer representation!
Contact me to learn more!