Working with a Buyer Broker Real Estate Agent

With a buyer broker, you sign a contract that says you will not look for a house with any other agent for a specific period of time. The buyer broker comes to you with appropriate listings and handles every part of the negotiation, including bidding strategy. Many also help clients search for the best available financing and insurance and set up all inspections.

Shrewd buyer brokers also watch the for-sale-by-owner market, meaning they may find homes a conventional agent would ignore. (They do this because you pay for their service, rather than the seller, so they get paid even if the house is sold by its owner.)

When buyer-brokers were first coming into vogue in the late 1980s and early 1990s, they often found themselves discriminated against by conventional agents, who either refused to share commissions, who would not work with buyer's agents and more.
While that eased in time, it is a reason why there are some parts of the country where virtually no one attempts to work on behalf of buyers. What's more, a few bastions of those days sometimes come up in contracts, which can affect how (and how much) you pay for using the services of a buyer broker.

For anyone who has worked with conventional agents and jumped from one to the next based on the open houses or areas you are looking at, the exclusivity of a buyer-broker arrangement will seem a bit limiting. In addition, one frequent complaint from people who have gone to buyer brokers and not been satisfied is that the broker got pushy as the exclusivity period neared its end.

Most buyer brokers also work as seller's agents; in other words, they are conventional agents except when hired to be otherwise. It is possible, therefore, to have an agent who is doing both sides of the deal, selling you one of her own listings; in that case, she acts as a "dual agent," which she must disclose to you. She is supposed to represent both you and the seller, which I think is impossible since she probably has too much information from each side to cut an honest deal, and since she is basically negotiating the deal with herself. Think of "dual agency" as "no agency" -- the agent is going to try so hard to close the deal to capture both sides of the commission that she won't act in either party's best interest -- and ask your agent to appoint a colleague to work with you if this conflict arises.
By Chuck Jaffe
Chuck Jaffe is a senior columnist and host of two weekly podcasts at MarkWatch. He has also been a guest speaker on several television and radio shows.

Copyrighted 2020. Content published with author's permission.

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