Do you really need a Buyer’s Agent?

February 10, 2019

Occasionally, we meet a Buyer who feels there may be an advantage to writing an offer with the listing agent of a home they would like to purchase.  What you may not know is in this situation you would be representing yourself with no one looking out for your best interests.

So when buying a home, who is looking out for you?  What if I told you, you could be represented essentially at no cost to you?  We will get to that later.  Let’s review a few questions we get on this subject;

Can I buy a house without a REALTOR?

Yes. Just like a Seller can represent themselves, a Buyer can represent themselves as well.

How does that work?

In Kansas, REALTORS® work with Buyers in one of 2 ways:

  1. As a Transaction Broker, the agent is not an agent for the buyer and does not advocate for the interest of the buyer.   The agent’s obligations are:
    • exercising reasonable skill and care
    • presenting all offers in a timely manner
    • advising the parties regarding the transaction
    • suggesting that the parties obtain expert advice
    • accounting for all money and property received
    • keeping the parties fully informed
    • assisting the parties in closing the transaction
    • disclosing to the buyer all adverse material facts actually known by the transaction broker, including:
      • environmental hazards affecting the property that are required to be disclosed
      • the physical condition of the property
      • any material defects in the property or in the title to the property
      • any material limitation on the seller’s ability to complete the contract
    • disclosing to the seller all adverse material facts actually known by the transaction broker, including all material facts concerning the buyer’s financial ability to perform the terms of the transaction
  2. As a Buyer’s Agent, who will represent the buyer and look out for the best interests of the buyer. The buyer’s agent is responsible for performing the following duties:
    • promoting the interests of the buyer with the utmost good faith, loyalty, and fidelity
    • protecting the buyer’s confidences, unless disclosure is required
    • presenting all offers in a timely manner
    • advising the buyer to obtain expert advice
    • accounting for all money and property received
    • disclosing to the buyer all adverse material facts about the property that the agent knows
    • disclosing to the seller all adverse material facts actually known by the agent, including all material facts concerning the buyer’s financial ability to perform the terms of the transaction

If a Buyer wants to represent themselves, they have that right, but Kansas license law requires your agent to discuss and disclose the pros and cons of working with a Transaction Broker over a Buyer’s Agent.

Will the Listing Agent provide me with comparable sales and help to negotiate the sale?

The Listing Agent’s loyalties and obligations are to the Seller. The Listing Agent should not give you any information that could prevent the Seller from getting the best price and contract terms.

If you’re unrepresented, the agent will put together the paperwork to make an offer for you, but will not be able to provide you with any advice regarding the terms of the contract.

If there’s only one REALTOR®  involved, can I get the commission that would have been paid to the Buyer’s Agent?

No. The Listing Agreement between the Seller and the listing brokerage notes, when a Seller lists their property for sale, they agree to pay the listing brokerage a certain percentage of the sale price, and the brokerage then agrees to offer a portion of the commission to the cooperating real estate brokerage (the brokerage that represents the Buyer). If there isn’t another brokerage involved in the transaction, the Listing brokerage keeps the full commission.

Additionally, in Kansas, license law states that commissions can only be paid to licensed real estate agents.

But if the Listing Agent is going to make more money, shouldn’t I get a discount?

In some instances, the Listing Agreement signed between the Seller and the Listing Brokerage specifies that a discount for the marketing fee could be applied if there is not a co-operating Broker, but when this happens, the discount is given to the SELLER – not the Buyer.

Why would I want an agent to represent me as a Buyer?

Great question!  For starters, there is no financial benefit to not having an agent represent you in a real estate transaction.  Entering into a Buyer Agency agreement to have a professional REALTOR® represent you and work on your behalf typically costs you nothing because the Listing Brokerage is paying the Buyer’s Agent for bringing and acceptable contract with a ready, willing and qualified Buyer.

Buyer Agents are paid because they have expertise and experience in valuing properties, advising you on inspections you may consider, explaining the details and fine print of the contract, negotiating contracts and terms and protecting the Buyer interests.

 

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