The Importance Of a Buyer Representative / Buyer Broker

There has been a lot of discussion in the industry and in the press lately about agents representing a buyer. Without getting into who ultimately compensates the buyer broker I would like to discuss the importance of the role and why everybody should strongly consider engaging with one. In this article I will use the terms buyer's agent/broker/representative interchangably.

Role of a Buyer’s Representative:

In Massachusetts (MA), as in many other places, a buyer's agent plays a crucial role in helping individuals or families purchase property. Using a buyer broker in real estate is exteremly important and offers several advantages:

1.     Representation: A buyer broker (buyer representative) legally represents the buyer client's interests in a transaction. As a client it means that they have a fiduciary duty to act in the best interests of the buyer, including negotiating the best price, terms and conditions, etc.

2.     Market Expertise: Buyer brokers have extensive knowledge of the local real estate market. They can provide insights into neighborhoods, property values, market trends, and future developments that could affect your investment.

3.     Access to Listings: Buyer brokers have access to a wide range of listings through Multiple Listing Services (MLS) and other networks. This gives buyers more options to choose from and increases the likelihood of finding a property that meets their criteria.

4.     Negotiation Skills: Experienced buyer brokers are skilled negotiators. They can negotiate on your behalf to secure the best possible price and terms for the property you are interested in.

5.     Navigating Paperwork: Real estate transactions involve a lot of paperwork and legal documentation. A buyer broker can help you navigate through this process, ensuring all documents are properly completed and deadlines are met.

6.     Vendor Referrals: Buyer brokers should have a network of professionals such as inspectors, mortgage brokers, and attorneys that they can call upon. They can recommend these trusted vendors who can assist with all aspects of the home buying process.

7.     Saves Time and Effort: Searching for a home can be time-consuming and overwhelming. A buyer broker can streamline the process by identifying properties that match your criteria, scheduling viewings, and handling the details of the transaction.

8.     Objective Advice: Buyer brokers offer objective advice based on their knowledge and experience. They can provide insights into the pros and cons of different properties, helping you make informed decisions.

Overall, using a buyer broker greatly enhances your home buying experience by providing expert guidance, saving you time and effort, and ensuring your interests are protected throughout the transaction.

“OLDCAR”

A buyer broker also has fiduciary responsibilities to their client. What does this mean and what does a buyer broker owe their client?? Glad you asked. There is an acronym used in real estate called “OLDCAR”. Simply put this spells out the realtor's responsibilities to their clients.

The acronym stands for the following:

• Obedience: Your Realtor represents your best interests and should respect your decisions irrespective of their personal preferences.

• Loyalty: Much like “Obedience”, a Realtor’s loyalty and best interests are mainly to their clients and to no one else; this loyalty is above personal gains such as an agent’s financial compensation, particularly in competing-offer situations.  

• Disclosure: Your Realtor is bound to disclose any and all material facts in their possession that might be of benefit to you. This includes any information that may give you the upper edge in the home purchase process.  

• Confidentiality: Your realtor is not expected to disclose any information learned about you , as their client, with respect to your business, financial or personal affairs, or motivations to others. This duty is for life and it survives the closing of the transaction unless a court of law instructs a disclosure of this duty.

• Accountability: Your realtor must be able to account for all documents and funds in the transaction. Accurate reporting of all funds relating to the transaction and their ultimate disposition is a fiduciary duty.  

• Reasonable care/diligence: Realtors are expected to advise intelligently on prices, inspections, negotiations, repairs, and many other aspects of a transaction. They are not allowed to act as an expert on aspects of  transaction that are out of their wheelhouse. Remember, your realtor is not a jack of all trade, hence, if you ask your Realtor some questions regarding things out of his/her area of expertise, he/she will advise you on how and where to obtain the information you inquire.

Experienced realtors are expected to take their fiduciary responsibilities very seriously! As a REALTOR® (the word REALTOR® is used as a designation here) a person vows to obey these responsibilities, uphold set standards, and could be sanctioned for not following these guidelines! Not all people that sell real esate are REALTOR®s.

Why A Buyer Should Avoid Dealing Directly With the Seller’s Agent

A buyer should exercise extreme caution when dealing directly (or even discussing a property) with a home seller's agent for several reasons:

1. Conflict of Interest: The seller's agent has a fiduciary duty to represent the seller's best interests. They are legally bound to prioritize the seller's goals, which may not align with what's best for the buyer. In fact it almost definitely will not!

2. Limited Information: The seller's agent may not disclose all information about the property that could be beneficial for the buyer. They might focus on highlighting the property's strengths while downplaying its weaknesses.

3. Negotiation Disadvantage: Since the agent represents the seller, they are skilled at negotiating in the seller's favor. Buyers might find themselves at a disadvantage during negotiations without their own representation.

4. Complex Process: Buying a home involves legal contracts, inspections, financing details, and other complexities. A buyer's agent can help navigate these processes and ensure the buyer's interests are protected.

5. Legal and Financial Advice: A buyer's agent can provide valuable advice on market conditions, pricing, and legal implications of the transaction. They can recommend appropriate contingencies and safeguards in the offer.

6. Market Knowledge: Buyer's agents have insights into the local market, comparable sales data, and trends that can help buyers make informed decisions.

In summary, while it's not illegal for a buyer to deal directly with a seller's agent, it's highly advisable for the buyer to have their own representation. This ensures they have someone solely focused on protecting their interests throughout the home-buying process.

How Do I Know If An Agent Is Up To The Task??

Obviously a proven track record is key. In addition however there are designations that indicate an individuals experience and continuing education in certain areas of expertise. Some of these follow:

Certified Residential Specialist (CRS®): In order to gain this certification an individual must demonstrate that they have successfully conducted a large number of transactions representing significant sales volume. They must also complete many hours of continuing education and successfully complete a comprehensive exam. It is said that CRS® represents the top 3% of realtors nationwide.

Accredited Buyer Representative (ABR®): With respect to this article ABR® can be seen as representing a base level of expertise with respect to buyers. The ABR® candidate must have successfully completed a number of buyer side transactions, complete additional hours of continuing education, and pass a comprehensive exam.   

Seller Representative Specialist (SRS®): SRS® can be seen as representing a base level of expertise with respect to sellers. The SRS® candidate must have successfully completed a number of buyer side transactions, complete additional hours of continuing education, and pass a comprehensive exam.   

Senior Real Estate Specialist (SRES®): The SRES® designation signifies that a realtor is well versed in the unique requirements of seniors that are looking to either buy or sell. This could be downsizing, rightsizing, or even aging in place.

Certified Pricing Strategy Analyst (PSA®): A PSA® designation signifies that the realtor has the expertise to analyze and accurately establish a value for a property (whether buying of selling). This designation requires continuing education and successfully passing an exam.  

Certified Real Estate Negotiator (CREN® or RENE®): These designations signify that a realtor has successfully completed continuing education and passed exams demonstrating that they have the skills required to successfully negotiate real estate transactions in their clients’ best interests.  

I would love to answer any additional questions you may have regarding buyer representation. Please feel free to reach out!