What is buyer agency and why is it beneficial to homebuyers?
Basically, it’s a formal agreement between a brokerage, an agent, and a buyer that they are going to work specifically with each other. It outlines what a buyer can expect from their agent and the brokerage, the timeline of the transaction, and other terms that define how each party will interact with others. It also includes a cancellation clause.
Buyer agency doesn’t cost as much as you may think in the grand scheme of things. Remember, the seller (or their broker) pays your agent’s commission, so a buyer agency agreement will only cost you anywhere from a couple hundred dollars to upward of $1,000. In our case, you wouldn’t pay anything until the time of settlement.
We always recommend having a buyer agency agreement because it guarantees you’ll have an experienced professional on your side who knows the market and knows how to get you the best deal possible. It also helps protect your best interests: Buying a house is a business decision, and the agreement insulates you from making any emotional decisions.
Sometimes buyers assume they can get a better deal by skipping buyer agency and going straight to the listing agent, but that’s a myth. Not only are you forgoing professional representation in this case, but you’d also be working with someone whose job is to get the seller the best deal possible.
Buyer agency also applies to many “For Sale by Owner” situations and new construction purchases. In the case of “For Sale by Owner” sellers, many of them want to expose their home to the agent community and are willing to work with buyer’s agents. For new construction purchases, the builder hires their own sales representative to protect their interests, so you’ll need a buyer’s agent on your side to do the same.
As always, if you have any questions about this or any other real estate topic or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to us. We’d be glad to help you.