Purchasing a home is one of the most expensive investments that you will ever make. Working with an experienced and seasoned Real Estate agent can make the difference between a smooth transaction and a nightmare ordeal. That being said, why wouldn’t you seek out a professional to guide you through this process, but working with a Real Estate agent isn’t as black and white as most people think. Many believe the only thing they have to do is pick up the phone or send an email and ask to start viewing homes. Which in some cases is true, but a good agent would like to meet with the buyer first and explain the home buying process and the benefits of buyer agency.
Before I get into explaining exactly what buyer agency is I first need to speak about agency in general. You’re probably asking yourself “What is agency?”. In a nutshell, agency Is the Real Estate agent’s current legal role in the home buying process. Now, with that said, this article is being written from the standpoint of Wisconsin agency laws. In the state of Wisconsin when you first communicate with the Real Estate agent he is in a pre-agency situation, this means he does not represent neither buyer or seller, he is a neutral party that must treat both buyer and seller in a fair and ethical manner. He is responsible for supplying relevant market information, and for the most part is acting as a facilitator while showing homes. Most people would say, “This is an ideal situation, the real estate agent is showing me houses, and he is supplying me with the home data I need.” Now, this is true but the one thing that is missing is the Real Estate agent’s personal and professional opinion of the home, which he is not legally able to give in pre-agency situation. Hence the importance a buyer agency.
Buyer agency is a legal contract signed by both buyer and agent creating an agency relationship between both parties. At this point in time the buyer is no longer a customer but becomes the Real Estate agent’s client. In this situation the Real Estate agent has become the buyer’s agent. This gives the Real Estate agent the legal right to represent the buyer in contract negotiations and opens up the door for the agent to actually give his personal and professional opinion regarding the home as well as other aspects of the real estate transaction. This means that the Real Estate agent is working on behalf of the buyer’s best interest, which of course you would want when buying a home.
Now, working with a Real Estate agent under buyer agency does have some requirements. For instance, the buyer’s agency agreement has a specific time frame in which you are legally bound to work exclusively with the agent with whom you signed the contract. This means that in the event that you purchase a home with another agent while your buyer agency contract is in effect you may owe compensation to your buyer’s agent. In addition it is not uncommon for some agents to charge a fee to work as a buyer’s agent, this can usually be negotiated. That being said, there are many agents that do not charge you a fee to work under this agreement. So, be sure you are diligent, and feel comfortable with the terms that you negotiate with your Real Estate agent.
Working with an experienced Real Estate professional can help make the home buying process a whole lot easier. In order to reap the full benefits of working with your agent you must have a buyer’s agency in place. That being said, committing to work with one agent may be intimidating for some. If you do your research, seek out a Realtor you trust and are comfortable with, this will not be a problem. Just remember, don’t be afraid to ask questions if you don’t understand something, a good agent will always be happy to address any concerns you may have.
By: Virgilio Maldonado