Many buyers do not fully understand the home buying process and the role of a real estate broker. Here are some of the most often asked questions brokers receive from buyers.
What is a "Buyer Agency Agreement"?
A "buyer agency agreement" is a contract between a buyer and a real estate broker. Contracts can vary in length, and can include or exclude certain geographical areas. The buyer agency agreement lays out the commitments of the buyer to the broker, and of the broker to the buyer.
Is it expensive to use a buyer’s broker?
The compensation that a buyer’s broker (also called the "selling broker") receives typically comes from the seller’s proceeds and is a percentage of the total commission charged by the listing company. That information is available to me through the Multiple Listing Service (MLS). In such a case, there is no cost for a buyer to be represented by a broker.
If a buyer is interested in purchasing a property not listed in an MLS, it is possible that the seller will not compensate the buyer’s broker. In this case, a buyer agency agreement would detail the buyer’s obligation to compensate their broker. Typically, even with unlisted properties, the seller compensates the buyer’s broker.
What is a "dual agent", and should I work with one?
"Dual agency" refers to the practice of a single broker representing both the buyer and the seller during the real estate transaction. When a broker acts in a dual capacity, they owe the same fiduciary responsibility to both parties. Most states have a required brochure or pamphlet which details the responsibilities of buyer’s brokers, seller’s brokers, and dual brokers. Buyers considering the use of a dual agency broker should pay particular attention to the difference in responsibilities when a broker acts as a representative of both the buyer and the seller.
When you are working with an broker who is acting as a dual agency broker, you have lost your strong "advocate" in the buying process. In addition, buyers usually meet dual agency brokers at open houses – meaning that the broker has already developed a strong working (and contractual) relationship with the seller. In such a case, it’s human nature that the broker is going to feel a stronger responsibility to negotiate on the seller’s behalf. Since the seller has already agreed to compensate a broker as part of the listing agreement, it only makes sense for you to find a broker who is solely committed to being your advocate. The practice of dual agency, when not performed correctly, is one of the leading causes of real estate litigation.
What type of information will my broker need from me?
To do the best job for you, your broker will need the best information you can provide. This would include such things as:
preferred price range
number of bedrooms / bathrooms
style of home (single-story, two-story, etc.)
size of yard
preferred school districts
geographical areas / neighborhoods of interest
special needs / special interests which your home needs to accommodate
Keep in mind that a very specific set of criteria may narrow your list of potential properties, while a very broad list may lead to an overwhelming number of properties to view.
How can I find out about new properties?
Your broker can work with you to determine how often you want to receive updates on available homes, and by what method (telephone, email, snail mail). Clients using email can receive automatic updates from most MLS systems as soon as new listings are entered.
Can my agent provide information on properties listed with other companies?
Yes, provided your broker is a member of the MLS where the property is listed. Some communities have more than one MLS, so it’s important to find out which MLS(s) your broker subscribes to.
What if I find a property on my own?
With the advent of the internet, many buyers have begun searching for – and often finding – properties of interest while working with an agent. If you have an agent, contact them with the address or the MLS number of the property in question. Your broker can then contact the broker of the property. It is never appropriate for you to contact the seller of the home directly if it is a listed property; you also should not contact the listing agent directly.
Can I go to open houses without my agent?
Yes. However, when meeting the broker hosting the open house it’s best if you immediately identify yourself as working with another broker. If you don’t, your broker might not be able to help you write an offer on that property in the future.
Can I work with more than one broker?
Sometimes buyers think that having more than one broker "working for them" means they’ll have more sets of eyes looking out for the perfect home. The reality is that brokers all have access to the same database of homes on the market—the MLS. Working with just one broker also allows that broker to spend enough time with you to really get to know you and your wants and needs. They’ll be able to ask questions as they show you homes, helping you refine your parameters as you go. Having one broker also saves you time, as once your broker knows you well, they will not show you homes they know will not work for you. Finally, it’s a difficult situation for a brijer to work with a buyer who is working with multiple real estate brokers; without a commitment from you to work with just one broker, it’s not likely that the broker will do their best work for you.
The exception to this situation is a buyer who is looking in a large geographic area. If you are looking for property outside the market area your broker specializes in, ask them for a referral to a broker in another area(s). That way, both brokers are in communication during the home search, allowing them to partner in finding you the right property.
What if I am unhappy with my broker?
Let your broker know that you’re unhappy, and the reasons why. It may be a simple misunderstanding that can be corrected. If the issues are more substantial, or the relationship simply isn’t the right "fit", tell the broker you no longer wish to work with them. If you have a buyer agency agreement with your broker, you will need to provide a written cancellation of the agreement.
Don’t let a less-than-perfect relationship keep you from finding another broker to work with. Buying and selling real estate are complex transactions, and it's important you have a broker to represent your interests.