Who has the upper hand in a real estate transaction - the seller or the buyer? Regardless of market cycles, if the buyer doesn't have an agent working on their behalf, the seller with an agent will always have the upper hand. This article lays out four ways for buyers to alter the balance of power in real estate transactions.
You've probably heard someone say, "It's a buyer's market" or "It's a seller's market" when it comes to real estate. And while it's true that conditions in the real estate market can favor one side or the other, in a majority of transactions, the seller has the upper hand.
Why? Because the real estate agent showing the home to prospective buyers is working on behalf of the seller, not the buyer. And that's the way it should be! As a property seller, you'd want the real estate agent working to get you – and not the buyer – the best offer possible.
But as a property buyer, this obviously doesn't work in your favor. So it may be in your best interest to hire a buyer's broker to act on your behalf, and here are four good reasons why:
#1 - They help you find a home that's more in line with your desires.
Oftentimes, a seller's agent will only show you what they have to sell in their own portfolio. And if you stick with that agent, you'll be faced with making concessions you might not have had to make, if you had a buyer's broker showing you homes from a number of different selling agents.
#2 – They'll act as your experts in evaluating homes for potential issues.
Not everything that could affect a home sale or value gets listed in the purchase and sale agreement. For example, that empty lot next door the selling agent claims is unbuildable? A buyer's agent will tell you if that's right, or if the selling agent's just telling you what you want to hear.
#3 – They'll negotiate a better deal for you than you could by yourself.
Most people aren't experts at the art of negotiation. And it's almost certain the selling agent will be a better negotiator than you are. With a buyer's broker in your corner, you'll have an experienced negotiator working for you – one who's also well-versed in the intricacies of the deal you're about to make.
#4 – They're paid out of the selling agent's commission.
Except for properties that are "For Sale by Owner," your buyer's broker gets half of the selling agent's commission as payment for his or her services. Some buyer's brokers may ask for a downpayment on their services, which gets credited toward your eventual closing costs, but otherwise, there's no additional cost for you to have a buyer's broker on your side.
So if you're in the market for real estate right now, or even planning on it soon, start asking around for recommendations. With a dedicated buyer's broker helping you, you'll not only have a better chance of finding the right property for you, but you'll also have a better chance at owning it for less money.
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