Granger Real Estate, 490 Vt. Rt. 30, Newfane, VT 05345 - 802-365-7600
Buyer RepresentationBecause there seems to be so much misinformation about this very important subject, we've decided to at least clear up some of the misconceptions we find prevalent. Representation is complicated with lots of ramifications and there are plenty of advantages and some real disadvantages. We'd be very happy to discuss these with you in depth but here are just a few of the major considerations:
There is life after closing.
- The Vermont Real Estate Commission mandates that at first substantive contact, real estate agents disclose the nature and types of representation to you. Most will ask you to sign a form. Signing the Agency Disclosure does not mean the agent represents you.
- You are only represented if you sign a contract for representation. You may want to work with various agents prior to making this decision. You may also want to work with an agent for a while before signing a contract for representation. Signing an agreement before seeing how well you work together may not be in your best interest.
- You should be aware of the advantages and disadvantages of Buyer Agency before making a decision. You can decide at any time right up to making an offer that you want or need to be represented.
- Before signing a Buyer Agency Agreement, you should understand all of the types of representation, especially if you feel you might find a house yourself that is not listed for sale. An Exclusive Right To Represent agreement is quite different from an Open Right To Represent.
- No agent can represent both a Buyer and a Seller. Each office should disclose to you their policy in the event they are representing you (or not) and you become interested in one of their listings. An agency's office policy could mean that after spending months being represented by your agent and the firm, you now have to work with someone from another firm you don't know, in order to have representation and to write up and present your offer. And at that time, you may have to pay the new Buyer Broker a fee or commission.
- The agent and the entire firm represent you when you sign a Buyer Agency agreement. That doesn't mean that you will always be the first to know about their new listings or the first to see them. Most companies represents their Sellers, so agents are also offering properties to both you as their client and other unrepresented buying customers.
- Your Buyer Agent can completely advise you about a purchase. This will include everything from location, school quality, overall desirability, the asking price and so much more. The agent can also discuss a strategy for making an offer and discuss the various what-if scenarios. You should be aware that this very positive aspect of representation, can be a disadvantage when your agent presents the offer. The Seller's agent has no way of gauging whether the Buyer's agent is 'posturing' for a better price or you are actually firm on your final offer. The 'opposing' nature of representation - one agent representing the Buyer and another representing the Seller, can be a disadvantage in a negotiation process, especially in a multiple offer situation.
- If you decide to be represented, choose an agent and firm very carefully. The highly technical nature of the modern real estate transaction can involve thousands of dollars of your deposit money. This money could be at risk if your agent makes a mistake. An experienced Realtor knows how to protect you when making an offer, writing a contingency or solving inevitable differences between you and the Seller.
- Don't assume that you're going to get a better price for a property just because you've chosen to be represented. Sellers have 'bottom lines' just like you have a limit on what you'll pay. Realtors try very hard to have a win-win transaction and most go fairly smoothly but having an agent represent you is no guarantee that there will be no problems during or after the transaction or that you'll get the property for less.
- If you decide to not be represented, the agents are still charged with treating you fairly and making full disclosure. Any significant defect that would effect the marketability of the property still needs to be disclosed to you. You should, however, be careful not to discuss your 'bottom line' price or say anything that you wouldn't want the Seller to hear. Not being represented can be an advantage in the negotiations if you only tell the agent what you want the Seller to hear.
- Who will pay for the services you receive? Often but not always, if a property is listed for sale, your agent's compensation will come from the commission. You should be sure to understand the financial ramifications to you before you sign a brokering agreement if the commission is not going to be compensating your agent. Likewise, understand the compensation should you buy a property not listed for sale.
- Don't assume that because you're represented, everything will be taken care of for you. You still have to understand the transaction and continually communicate your needs to the agent. You and the agent work together to get to closing. There may be others involved as well, lawyers, loan originators representing banks, appraisers, structural inspectors and sometimes other contractors. Have the agent explain the process to you, especially before making an offer.
- Either way a good Realtor can guide you through all of your choices and make sure that the buying process is a positive experience.
- If you've gotten this far, you're probably saying, "I just want to buy a house." Call or email us.
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Granger Real Estate
490 Vt. Rte. 30, Newfane, VT 05345