Buyer's Agents
There are several categories of buyer's agents. The National Association of Exclusive Buyer Agents Web site lists these three:
Exclusive Buyer Agent (EBA): This agent works for an office that does not take listings of any kind and represents only buyers.
Single Agency Buyer Agent (SA): This agent works for an office that takes listings, represents buyers and sellers, but will represent only one client in any real estate transaction. Will not practice dual agency!
Buyer Agent (BA): This agent works in a traditional real estate office that takes listings. Will work with a buyer under contract. If a buyer wishes to purchase a property that is listed by their office, they will declare "dual agency" and represent both the seller and the buyer.
Your third option, using a buyer's agency, means the agent is working with your best interests (and wallet) in mind. A buyer's agent will work to negotiate the best price, ensure the property is inspected, and make sure you have the representation you need. Things you tell a buyer's agent remain confidential. Using a buyer's agent also means that you will be shown homes that are For Sale By Owner (FSBO). It might seem like using a buyer's agency means you are going to pay more -- but that's not always the case. Although there are situations where agents charge an hourly fee or a flat fee for the service, in most situations they are simply working for the same commission that is paid by the seller and split it with the seller's listing agent. While there is still some argument that this method leaves the incentive for a higher sales price, buyer's agencies counter by pointing out that a $10,000 savings for the buyer only amounts to a $150 difference in commission for the buyer agent. They feel that the benefit of your satisfaction with their service and the word of mouth promotion they will get outweigh the loss of this small amount of money.
The type of agreement you sign with a buyer's agent will dictate how the arrangement works. A limited agency agreement may stipulate, specifically, for what the agent will be paid. For instance, the agreement might state that if you find a home on your own, then no commission will be paid. Basically, you can negotiate the terms of the agreement up front so both you and the agent know what to expect and are comfortable with the relationship. Typically, however, if the agent has been otherwise very helpful and attentive, most buyers still pay some type of commission even if the agent was not involved in finding the home they end up purchasing.
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