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The Comprehensive Role of a Buyer's Agent in Real Estate Transaction

Friday, December 1, 2023   /   by Mariah Smith

The Comprehensive Role of a Buyer's Agent in Real Estate Transaction

Navigating the real estate market can be a complex and daunting task, especially for first-time homebuyers. This is where the expertise of a buyer's agent comes into play. A buyer's agent is a licensed real estate professional who represents the buyer in a real estate transaction. While some may question the necessity of paying a commission to a buyer's agent, the benefits they bring to the table far outweigh the cost. Here are some compelling reasons why buyer's agents deserve their commission:

Counseling Session Activities: 

  • Prepare the buyer for executing a buyer representation agreement: The buyer's agent prepares the buyer for signing a buyer representation agreement, explaining its terms and conditions in detail.
  • Explain agency relationships: The agent explains the different types of agency relationships in real estate transactions and obtains the necessary legal consent for representation.
  •  Inform the buyer of the working relationship: The agent informs the buyer about the working relationship based on state law, the REALTORS® Code of Ethics, and the broker’s business policies.

Building a Relationship: 

  • Understand the buyer’s needs and budget: The agent takes time to understand the buyer's wants, non-negotiable needs, and budget. They also help the buyer understand what property their chosen budget will buy
  • Provide quality lender resources: The agent provides the buyer with quality lender resources, helping them understand their financing options.
  • Partner with the buyer to locate suitable properties: The agent works closely with the buyer to identify suitable properties that match the buyer's needs and preferences.
  • Re-evaluate buyer’s needs: The agent constantly re-evaluates the buyer's needs and refocuses property showings to fit those needs.
  •  Explain compensation: The agent explains how compensation is paid, who pays it, and what the buyer’s options are for paying it. 

Educating the Buyer:

  • Explain Federal and State Fair Housing laws: The agent educates the buyer about Federal and State Fair Housing laws, ensuring they understand their rights and responsibilities.
  • Inform the buyer about property disclosures: The agent explains what to look for in applicable property disclosures, helping the buyer make informed decisions.
  • Reassure the buyer about confidentiality: The agent reassures the buyer that their personal information will remain confidential throughout the transaction.
  • Provide information on neighborhood resources: The agent discusses available resources that the buyer can check to learn more about prospective neighborhoods.

Preparing the Buyer:

  • Explain the timeline for house hunting, mortgage approval, and closing: The agent explains the timeline for various stages of the home buying process, helping the buyer plan accordingly.
  •  Explain the local market: The agent explains the local real estate market and how it impacts the buyer. They show statistics on what percentage of list price sellers in the area are currently receiving.
  • Identify current average days on the market: The agent identifies the current average days on the market, helping the buyer understand the pace of the local real estate market.
  • Share estimated potential out-of-pocket costs: The agent shares an estimate of potential out-of-pocket costs to complete the transaction, helping the buyer budget appropriately.
  • Assist in comparing different financing options: The agent assists the buyer in comparing different financing options, helping them choose the best one based on their financial situation and goals.

Showing Properties:

  • Schedule showings: The agent schedules showings and provides access to all listed properties as soon as they become available in their local MLS broker marketplaces.
  •  Educate the buyer on new listings: The agent educates the buyer on the immediacy of new listings appearing in their local MLS broker marketplaces and the lag time for them to appear on some websites.
  •  Research unlisted properties: The agent researches and assists with all unlisted properties the buyer wishes to see, ensuring they don't miss out on any potential opportunities.

Negotiating Offers:

  • Assist the buyer in getting the best property at the best price: The agent uses their negotiation skills and market knowledge to help the buyer get the best property at the best price.
  • Prepare a comparative market analysis (CMA): The agent prepares a CMA in advance of making an offer, helping the buyer understand the value of the property in the current market.
  • Write an attractive offer: The agent helps write an offer that has a reasonable chance of being accepted, considering the current market conditions and the seller's situation.

Advocating for the Buyer and Facilitating the Close

  • Advocate for the buyer throughout the entire process: The agent advocates for the buyer's interests throughout the entire process, from initial property search to final closing.
  • Encourage the buyer to fully investigate their options: The agent encourages the buyer to fully investigate their options in terms of a home inspector, title company, appraiser, mortgage lender, and other services.
  • Review and discuss home inspection concerns: The agent reviews the home inspection report with the buyer and discusses any concerns or issues that need to be addressed.
  •  Assist in coordinating communications: The agent assists in coordinating communications between various parties involved in the transaction, ensuring a smooth and efficient process.
  • Support the buyer in any final closing activities: The agent supports the buyer in any final closing activities, ensuring they are prepared for the closing day.

In conclusion, the role of a buyer's agent in a real estate transaction is indispensable. Their expertise, extensive network, negotiation skills, and unwavering support are instrumental in helping buyers navigate the complex real estate market and find their dream home. While there is a commission involved, the immense value they bring to the table more than justifies this cost. Therefore, if you're considering purchasing a property, engaging the services of a buyer's agent should be one of your top priorities.