What You Need To Know About Buyer's Agents

Thinking of purchasing a new home?

Before you begin looking, any prospective buyer will want to know what a buyer's agent is, does and expects after the sale. Hiring an agent to represent your interests can be very beneficial, but home buyers need to understand the agent's role. Understanding on both sides will ensure that you are not charged big fees for not abiding by your agreement.

What Is A Buyer's Agent?

This agent is simply a real estate agent who agrees to represent the buyer's interests in a house sale, helping to find a property, negotiate a price, submit an offer and prepare for closing.

Who Pays A Buyer's Agent?

The buyer's agent is usually paid from the proceeds of the sale by the seller. This is typically noted on the data placed by the seller or realtor in a multiple listing service. Be careful though: if you buy a home directly from the owner (also called "for sale by owner" or FSBO), you are likely responsible for the agent's commission. Keep in mind though that everything is negotiable in any sale.

What Is An "Exclusive Buyer Agency Contract?"

When you hire a buyer's agent, you will likely be asked to sign an agreement requiring you to work exclusively with a specific agent for a set period of time. The agreement states how the agent will be paid -- by flat fee or commission -- and under what conditions the buyer is liable for payment.

Why Would A Real Estate Professional Choose To Be A Buyer's Agent?

Real estate agents like to have a contract with the buyer because they are guaranteed payment if their client buys a house. A real estate agent often invests time and expense showing houses only to be left out of a deal if the client finds a house without the agent.

How Does A Buyer Benefit From Having A Buyer's Agent?

A buyer's agent will work harder for a client who has signed a contract, says Stephen Casper, a Cincinnati broker and a director of the National Association of Realtors. Agents may have many clients, but "someone who signs a buyer's agency agreement is at the top of the list," Casper said.

Is There Any Downside To Having A Buyer's Agent?

A consumer could become disappointed with the agent's performance after signing a contract. Contact the agent's broker to discuss the situation, experts say. You may receive better service or the broker may even agree to cancel the agreement. You may be able to avoid this problem by making the initial contract for a short term -- say, 45 days -- says John LeClair of Buyers Realty. The contract can always be extended once you have time to determine how well you work with your agent.

Should You Talk With A Lawyer Before Signing A Buyer's Agent Agreement?

Yes, says Lynnore Fetyko, CEO of the Greater Syracuse Association of Realtors. The agency agreement is negotiable and binding so you should get advice. "You're going to need a lawyer to help with your home purchase anyway," Fetyko said. "You should hire the attorney in the beginning when the lawyer is aware of everything that you're signing," she said.

--L. Morse