Almost all home sales in Fairfax and other areas of Northern Virginia involve a buyer’s agent. A buyer’s agent is bound legally and ethically to look out for the best interests of the buyer in a real estate transacton, but they are not always motivated to give you all the effort and attention you desire. If you buy a home, it is to your benefit to work with your buyer’s agent in such a way that they will be motivated to represent your interests with gusto. Put your agent in a position to do just that and you both will end up happy with the purchase of your home. I have the following three suggestions for you:
1. Negotiating your Buyer’s Agent commission upfront will motivate them to work for you and not against you. Buyer’s Agents are almost always paid by the seller, but as a buyer you need to understand that sellers use the commission amount to attempt to motivate your agent. Is your agent being motivated to work against your or for you? In the contract you sign with an agent it should be clearly stated what they will be paid. If an agent has agreed upfront that he can be paid no more and no less for his services, it takes away any incentive a seller might try to give him to urge you towards purchasing their house.
Say you agree that your Buyer’s Agent will receive x% (sorry I can’t use real numbers, but in my own business x=3) of the selling price of any house you purchase. If a seller is offering a commission of x+1% to buyer’s agents your BA won’t be motivated to get you to buy a house that is not right for you in order to pick up the extra commission. The extra 1% of commission would go to you, not the Buyer’s Agent, and he would advise you on the house just like any other house.
If a seller is only offering a commission of x-1% to buyer’s agents, you should let your Buyer’s Agent know upfront that you will cover the other 1% of his commission. When other agents are not showing that house because of the low commission you may find that you save a lot more than 1% by simply letting your agent know that he will receive the commission agreed to upfront no matter what the case. Cases like these might be the best deals out there because they are being shown less and the sellers may be getting desperate. If it’s not worth paying the extra commission don’t buy the house.
2. Your Buyer’s Agent will work harder to further your interests if you make a commitment to purchase a house from him. This is your chance to tell your agent that you are on his side, jut like you want him to be on your side. If you are working with multiple agents each one will be wanting to sell you a house before the others.
Each agent has access to the same database of houses so it’s not like the old days when each agent had their own inventory. This is a bad situation for a buyer. Each agent will try to sell you a house quickly to beat out the other agents you are working with. You want an agent who will advise you with your best interests in mind. If you are working with an agent who is not worth committing to, find one who is.
3. Your Buyer’s Agent will work harder to further your interests if you let him know you plan to refer him to your friends and colleagues. Some have questioned whether an agent can legitimately be trusted to work for a lower price on the house their clients want to purchase when their commission is based on a percentage of that price.
An agent who knows that you will be sending them their future clients is greatly motivated to not only get you a fair price, but get you a price as low as possible. It doesn’t benefit an agent to grab a couple hundred dollars extra in a transaction only to lose tens of thousands of dollars because he alienated a client who would have referred him future business.
If you take my ideas from this article to an agent you are working with, some will resist my first suggestion because of the many opportunities agents have in this market for higher commissions. I would insist on it anyway, and even switch agents if you need to. My second two suggestions will thrill any agent you are dealing with. And that is the point. You want an agent who is glad to be working with you, and who will work hard to see that you are a satisfied client.