Why to use a buyers agent?
Your third option, using a buyers agency, means the agent is working with your best interests (and wallet) in mind. A buyers agent will work to negotiate the best price, ensure the property is inspected, and make sure you have the representation you need. Things you tell a buyers agent remain confidential. Using a buyers agent also means that you will be shown homes that are For-Sale-by-Owner (FSBO). It might seem like using a buyers agency means you are going to pay more — but that is not always the case. Although there are situations where agents charge an hourly fee or a flat fee for the service, in most situations they are simply working for the same commission that is paid by the seller and split it with the sellers listing agent. While there is still some argument that this method leaves the incentive for a higher sales price, buyers agencies counter by pointing out that a $10,000 savings for the buyer only amounts to a $150 difference in commission for the buyer agent. They feel that the benefit of your satisfaction with their service and the word of mouth promotion they will get outweigh the loss of this small amount of money.
Commissions and contingency fees depend on the complexity of the real estate search. However, these are outlined in advance in our contract.
The type of agreement you sign with a buyers agent will dictate how the arrangement works. A limited agency agreement may stipulate, specifically, for what the agent will be paid. For instance, the agreement might state that if you find a home on your own, then no commission will be paid. Basically, you can negotiate the terms of the agreement up front so both you and the agent know what to expect and are comfortable with the relationship. Typically, however, if the agent has been otherwise very helpful and attentive, most buyers still pay some type of commission even if the agent was not involved in finding the home they end up purchasing. If you do decide to use a buyers agent, be sure to read the next section.