Buyer Agency North Fork and East End, Long Island, NY

May 6th, 2009 category: Buyers, Real Estate News, Real Estate Philosophy

When you’re out looking at houses, know your real estate agent. Don’t just “like” them…like them because they represent your best interest- then, like them for any number of other good reasons.

In any real estate transaction, there are two parties involved; one, seeking to sell a house for the “best possible price”, and one seeking to buy that house for the “best possible price.” In this equation, you have the seller (and their Realtor), and a buyer.

As a buyer, how you enter the transaction- and with whom- will directly determine if you truly are getting the “best possible price.”

Because of many, many instances in which home buyers felt “duped” by their real estate agent after discovering that, in fact, they represented the seller in the transaction,NYDOS now requires a disclosure form, so that the position is crystal clear at first substantive contact.

If the real estate agent with whom you are seeking properties has not provided you with this, and checked the buyer agency box, you are not maximizing your buying power.

While it’s absolutely certain that buyers have access to many sites with statistics, homes for sale, homes closed, and other important data, having your offer facilitated by a Realtor either representing the seller, or waiving fiduciary to you, makes no sense.

“But I can find everything I need online, and know what to offer.”

It’s irrefutable that data is readily available. While data tells the story, and offers a solid set of guidelines, it can no longer be argued that data also provides a “future” glimpse into what we might expect over the course of the next few years- or months.

The market has changed so rapidly, and with such force, that having someone that would prefer to err on the side of caution (as opposed to abandonment) on your behalf is an intangible unappreciated until a property is located.

Rather than having a cheerleader encouraging abandonment and a hurry-or-it’ll be gone mentality, discussion with someone who has provided fiduciary in writing offers a more grounded experience- all facts, not just positive facts.

“But that’s what my lawyer is for.”

Lawyers aren’t involved, as a rule, in the appropriation of your property of choice in the earliest stages. Rather, their fiduciary dictates (this is not legal advice, just opinion) that the transaction itself have representation on your behalf. By the time they’re watching out for your “best interests”, the property itself has you involved. That’s not early enough for fiduciary to kick in.

“But I’ll get a better price if I go right to the listing company.”

This is likely the biggest error that can be made on the part of a home buyer. From the moment you enter into negotiations with the listing agent, who in turn goes directly to the seller, you’re being set up to fail.

While you might be a superb negotiator, able to navigate appropriate pricing, etc., it would be contrary to the home seller for their Realtor to advise you to do certain things, such as offer a lower amount; offer a lower deposit; request funds toward finance costs; include in your conversation with your lawyer potential contingencies in your favor- the list lasts for as long as the transaction lasts, as things come up.

Even though your negotiating powers might be exceptional, if you aren’t covered after the contract itself, you could find yourself at a closing with two real estate agents and a seller requesting additional funds for items that, were you covered earlier, would have been resolved. Nickles and dimes, or much more.

We had a recent closing in which the seller had not replaced the refrigerator, as promised- it was suggested at closing by the listing company that the buyer split the cost. Ridiculous, but it happens, and our buyer’s position was bolstered by an “even” representation. Ridiculous things can happen, right up until closing.

The experience is better overall if sellers and buyers feel adequately protected, to the best ability of the chosen Realtor(s), from start to finish. Closings are no place for negotiation, but it happens too frequently to ignore- before, as expected, during, not as expected, and at closing.

Our buyer would have had a distinct sense of unease had we, at the closing, been less vocal about him NOT paying an amount that was simply unacceptable (which was ANY amount). We would have felt less comfortable about being as vocal about the inequity had we “represented” the seller. He might have felt outnumbered with two advocates of just “getting the deal done” at his expense.

Being “fair” to a buyer (as required) is too subjective; the fiduciary verbiage required in New York makes clear that the interest of the buyer come before the interest of the seller, OR their agent, at all times, under buyer agency. The seller likely has the same “fiduciary” verbiage with their listing company, and as a result, the listing company, or an agent representing the seller, cannot by law offer fiduciary to the buyer.

Buying a home with an agent representing the seller makes no $ense. The price is just the first step. Level the playing field- as a home buyer, you deserve it, whether the home is a resale, bank owned, or new home. Buyer agency goes well beyond the presence of commission.

A copy of the disclosure form is here. If you are looking at houses with a Realtor and have not received it, request it immediately, and look for the “buyer agency” box to be checked. Without it, your Realtor is likely working for the seller, not you.

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This entry was posted on Wednesday, May 6th, 2009 at 11:54 pm and is filed under Buyers, Real Estate News, Real Estate Philosophy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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