01 May Advantages of a Dedicated Buyer Agent
On the Krishnan Team we have agents who ONLY work with buyers—which is somewhat rare. Most agents don’t dedicate themselves to only one side of the transaction. We have the roles split up; Yesenia Rogers and Lauren Neuschel only work with our buyers. Our buyers get service when they need it most—there are no distractions. We separate the two roles so that our agents really hone their craft, which is a great advantage. And, our agents, because they work on a team, have insights to what each other are doing. This means our buyer’s agent has insights into the listing side, and learns how offers are being structured and what people are doing to make their bids more competitive.
Let’s take a deeper dive into what a buyer’s agent does, and how their dedication to you can make all the difference.
What is a buyer’s agent?
A dedicated buyer’s agent has a fiduciary obligation and loyalty to the home buyer alone. It is their job to:
- Negotiate the best possible price and terms of purchase on buyer’s behalf
- Attend to the buyer’s needs, preferences, priorities and special requirements
- Solely represent the buyer’s best interests throughout the search, purchase, due diligence and escrow processes, and to render counsel accordingly.
- Disclose any and all information that might affect the buyer’s desire to buy a particular property or the price the buyer is willing to pay for it.
- Review disclosures, and help the buyer understand them
- Help find properties, both on and off market
- Communicate with the listing agent to obtain information on the property and address any questions in the disclosures.
Fiduciary responsibility of a buyer’s agent
A dedicated buyer’s agent has a fiduciary responsibility to represent the home buyer’s best interests in all aspects of the purchase process:
- The home search and property valuation counseling
- Purchase offer strategy and negotiation
- Due diligence phase of disclosure
- Investigation and inspection
- Any renegotiation of price and terms
- All other aspects of the transaction
What is a listing agent?
A listing agent has a fiduciary obligation and loyalty to the home seller. Sometimes they are referred to as a seller’s agent. It is their job to:
- Help prepare the home to sell
- Identify repairs and/or improvements to be made (if any) to increase the sales price
- Help the seller evaluate the return on investment (ROI)
- Market the home
- Show the home to prospective buyers and their agents
- Review offers and help the seller negotiate terms to get the best deal
Fiduciary responsibility of a listing agent
A listing agent has a fiduciary responsibility to the property seller.
- The listing agent may assist the buyer, but does not represent the buyer.
- The listing agent must put the seller’s interests first throughout the purchase negotiation and transaction—while still complying with statutory requirements for honest and fair dealing, and material disclosure to the buyer.
What is a dual agent?
Generally speaking, it is not in the best interests of buyers to use the listing agent to represent them in the purchase—in which capacity, the listing agent would then become a dual agent. A dual agent has a fiduciary responsibility of utmost care, integrity, honesty and loyalty to both buyer and seller, and thus cannot represent the best interests of either party. The dual agent must have the consent of both parties to act in this capacity, and must safeguard the confidentiality of both parties during any negotiations.
Because of a dual agent’s responsibilities to both parties, he or she can play little role in the negotiations besides facilitating communications. This is a significant drawback because a good agent’s negotiating skills can easily make a difference of 3-5% in the sales price, and sometimes more. A dual agent must not provide any information, such as the buyer’s willingness to pay more or the seller’s willingness to accept less, that might be used to the advantage of one party over the other.
If a listing agent tells you, as buyer, that he or she can get you a special deal because of their inside relationship with the seller, it is probable they have already violated their legal responsibilities and the Realtor Code of Ethics.
Buyer’s agent fees, demystified
In San Francisco, the buyer’s agent commission is always negotiated as part of the listing agreement, meaning the proceeds from the home will be used to pay both the buyer and listing agent’s commission. So, if there is a listing agreement in place, the buyer’s agent’s fees most likely will be covered. Occasionally, with a discount company, or in a For Sale by Owner situation, the lower commission will have been negotiated. In the event a buyer’s agreement is signed outlining a fee of say, 2.5 or 3%, the buyer would be asked to cover the difference as part of closing cost, or the fees would need to be negotiated as part of the sales contract. A good buyer’s agent will discuss fees and review this process with you during an initial buyers meeting.
There is a misconception that if a buyer doesn’t use a buyer’s agent, that they are going to get a reduced price from the seller. Most listing agents do not offer this type of discount, and then the buyer ends up being unrepresented in the transaction. Most listing agents do not want to be contacted by buyers directly. This is another reason why having a good buyer’s agent is to your advantage.
Why choosing a good dedicated buyer’s agent is important
The buyer’s choice of an agent to represent them in this large, complicated financial transaction is extremely important. The difference in results between having a very good agent and a mediocre one can be enormous. Having a good agent actually greatly increases the chances of your offer being accepted. And, since in the vast majority of real estate sales in San Francisco, the seller pays the buyer agent’s commissions, you should take advantage of having a dedicated agent to represent you as soon as possible in the process.
The average agent in San Francisco is writing 5-7 offers before getting a buyer into contract. Consider that it takes about 10 hours to drive to the property, see it, review disclosures, and write and review the offer. Meanwhile, a buyer may have grown emotionally attached to the property only to have their heart broken when they do not win in a competitive situation.
Contrary to popular belief, getting your offer accepted has far more to do with the agent and how they present your offer then the price at which you write. The price can be altered or countered, but if your agent does not have a great reputation with their peers, or doesn’t have the experience to help you prepare your offer in a clean way, then your offer can be dead before you even get started.
We often see agents who encourage clients to pay much more than necessary or to submit offers over asking when there are no other offers. A good agent will have some tips and tricks to ensure this doesn’t happen to you. Here are some questions to ask when hiring a buyer’s agent in San Francisco.
Looking to buy?
Call us today to find out how we can get you into home on your first or second offer, saving you tons of time and multiple heart breaks.
As top ranked buyers agents in San Francisco, we use our years of experience to advise you on the San Francisco market and help you find the right house at the best possible price, with the best terms. We always put your best interests first. And, of course, we handle all the details with the utmost care and discretion. Call the Krishnan Team at 415-735-5867 for a no-obligation consultation. You can also email us at firstname.lastname@example.org.