Buying a home is usually the largest purchase and financial commitment most people make in a lifetime. The process of finding and buying a home is both exhausting and complicated. For those reasons, you should find an experienced, local REALTOR in Portsmouth, NH, like Jim Lee and Ann Cummings from RE/MAX Shoreline, to guide you through the process, represent only you, and ensure your best interests are protected from start to finish. Here’s why Ann & Jim are your best choice.
Typically there are two REALTORS involved in a real estate transaction.
- The Listing Agent works directly with the seller and represents them.
- The Buyer’s Agent works with the buyers and represents them.
Both agents are legally bound to represent only the interests of their clients, the buyers and sellers.
Some buyers make the mistake of contacting the listing agent and asking them to show them a home they are interested in. Buyers often think they can “get a better deal” if they work with the seller’s agent.
There are several reasons why that can be a costly mistake
In New Hampshire, by state law, consumers, including home buyers, MUST be presented with a “Brokerage Relationship Disclosure Form” which lists the duties real estate licensees owe to both a customer (not a client) and a client. A client is anyone who has signed an agency representation agreement to represent that client in a real estate transaction. This agency disclosure form (which is not a contract) MUST be presented to all consumers at the time of the first business meeting and before the discussion of any confidential information.
A seller’s agent has theoretically already presented this form to his seller client when they all signed the listing agreement to market the seller’s house.
If you do choose to work with the seller’s agent, your choices of being fully represented are nonexistent. A seller’s agent can help you buy his seller client’s house with these agency choices:
- Seller Agency – “The licensee has the duty to represent the seller’s best interests in the transaction.” You are not represented.
- Single Agency – For all practical purposes, the same as a Seller Agency. You are still not represented.
- Disclosed Dual Agency – A disclosed dual agent is a licensee acting for both the seller and the buyer in the same transaction and with the knowledge and written consent of both parties. The licensee cannot advocate on behalf of one client over the other. You are not fully represented
- Facilitator – A non-agency status in which the licensee is not an advocate for either party and can only perform ministerial acts such as showing property, preparing an offer, or other customer-level services listed on the first page of the agency disclosure form. You are not represented.
None of these choices allow a licensee to fully represent you, the buyer.
Here Are Some Common Pitfalls When A Home Buyer Works Directly With The Listing Agent.
• If the listing agent is only representing the seller then they cannot by law be representing your best interest at the same time. On the other hand, if you have a buyer’s agent on your side, their loyalty and obligations are only to you and your interests.
• If the listing agent is only representing the seller, they cannot give you advice on how to structure an offer, what to offer, or answer any of the dozens of questions buyers often have during a transaction.
A bias and attendant liability can be created if one side does not feel fairly or fully represented. That can cause an increase in liability for a licensee who is working with both a seller and a buyer at the same time.
Why Can’t I Just Get An Attorney To Represent Me?
An attorney’s job in a real estate transaction is to ensure you are well protected contractually with a strong purchase and sales agreement. In New Hampshire, our purchase and sales agreements are prepared and reviewed by attorneys to make sure they comply with existing state and federal laws. Real estate licensees merely fill in the blanks on these preapproved forms.
Attorneys do not help you in the home selection process nor do they visit the home with you.
Additionally, the licensee you choose to be your Buyer’s agent typically works in the area you’re buying and is familiar with local values, customs, and other things related to a transaction that attorneys do not do.
Some ask; “How Much Does A Buyer’s Agent Cost?” But a better question might be; How Much Does NOT Having A Buyer’s Agent Cost?”
There is a cost to hiring someone to act solely on your behalf. First of all, real estate commissions are fully negotiable between the licensee and their proposed client.
Often the seller’s agent has already agreed to share the fee the seller is paying them with the agent that brings the buyer. If that fee does not cover your buyer’s agent fee, you can instruct your buyer’s agent to make any additional fees a part of your offer to purchase just like you can negotiate with a seller to leave items with the house. In any event, you will know exactly what amount you will be responsible for before you sign anything.
What Are Some Things My Buyer’s Agent Can Do For Me?
Glad you asked, here are just a few from a very long list:
• Assist in finding a local lender and helping you get prequalified for your purchase.
• Discuss various financing options currently available such as FHA, VA, Rural Housing, Jumbo Loans, and others.
• Identify your wants and needs in a new home.
• Network with other local agents for homes not yet in the MLS, aka “coming soon”.
• Help you select for viewing only those homes that fit your wants and needs.
• Assist you in analyzing the pros and cons of each property.
• Assist you in evaluating properties for suitability, affordability, and resale value.
• Educate you on whether we’re in a buyer’s market or a seller’s market.
• Provide you the latest market data such as days on the market, list price to sold price ratios, closed prices, and other current market data.
• Guide you in preparing a purchase and sales agreement to make an offer on a property.
• Help you create a negotiating strategy.
• Ensure you receive and understand all required state and federal disclosure forms
• Prepare you for multiple offer situations and develop negotiating strategies relative to multiple offers.
• Recommend inspectors, lenders, attorneys, and other professionals as necessary
• Be an advocate and advisor during the closing process.
• Review and discuss home inspection concerns.
• Monitor and communicate required contract deadlines to ensure they are met.
• Accompany buyer clients on the final walk-through before closing to ensure the property is in the same condition as when contracted and that all contingencies have been met.
• Remain a life-long trusted advisor for real estate questions, needs, and concerns.
And lots more.
Finally, you should make sure the real estate licensee you hire to be your buyer’s agent is a REALTOR which means they are members of the National Association of REALTORS (NAR) and have pledged to abide by their strict Code of Ethics. Not all real estate licensees are REALTORS.
REALTOR members of NAR can also earn advanced designation to enable them to better represent clients. Two good ones to look for are:
- Certified Residential Specialist (CRS) – The CRS designation is the gold standard in residential real estate and ensures that a designee has received advanced training, has a proven track record of experience, and is continuously improving their skills in an ever-changing real estate environment.
- Accredited Buyer Representative (ABR) – An ABR designee has undergone specialized training in working with buyers, also has a proven track record of representing homebuyers, and has proven experience in that field
Give us a call today and let’s get started on your journey to homeownership.
