by Blanche
Evans
What is a buyer's
agent? If they are paid by the seller, along with the seller's agent,
then what can they really do to benefit the buyer? John Thomas, with
Jean Rogers, RE/MAX North Atlanta Affiliates in North Atlanta, explains
what a buyer's agent is and why he chose to be one in this exclusive
AgentNews interview.
John is a buyer's agent who
got his relocation experience first-hand when relocating to Atlanta
from the Midwest several years ago with his wife, Sannie, and their
three children. He is an active member of the Atlanta Chamber of
Commerce and is well known by civic leaders, local businessmen and
women, educators, and vendors of all kinds as a relocation advocate. He
holds a bachelor of arts degree in education from Loras College and has
done postgraduate work in both economics and marketing.
A.N.: What is a buyer's
agent?
J.T.: A buyer's agent has a legal and professional responsibility to
the buyer, unlike a traditional transaction in which the agents on both
sides of the table really represent the seller. This is a new advantage
for buyers in today's market. In many states, there is only seller
representation, and the agent's responsibility is to get as much money
for the seller.
A.N.: Even if you are
working for the buyer?
J.T.: Most buyers don't realize that fact, but yes. You are paid by the
seller, and ultimately you are trying to get as much money for the
seller as possible, which limits some information you can share with
the buyer. That is why buyer agency is so important. It gives buyers a
real edge in negotiation, and they have someone who is truly working in
their best interests.
A.N.: Then how is a
buyer's agent different from a seller's agent?
J.T.: The seller's agent is trying to get the most money for the
seller. The buyer's agent is trying to get the best deal for the buyer.
But there are some things we can do that you can't do as a seller's
agent representing a buyer because you would be violating your
fiduciary responsibility to the seller.
A.N.: Like what?
J.T.: Buyer's agents really investigate the market to find the best
house and deal for the buyer. We research more avenues to find
available properties, including corporate listings, FSBOs, and
foreclosures. A seller's agent will most likely show their listings to
the buyer first, and then what they can find in MLS. Another key
difference is that a listing agent will not typically share all the
results of the comparable analysis with the buyer if any of the
information conflicts with their responsibility to get the seller the
best price. So a buyer won't know what the percentage of listing price
to selling price is in a given neighborhood to determine how cheaply a
house can be bought. That means the buyer is negotiating at a
disadvantage because they don't have access to all the information.
A.N.: What is helping the
buyer agency movement to get off the ground?
J.T.: It is consumer-driven. Buyer agency is what the more educated
consumers want. They want to be represented in any important
transaction.
A.N.: Is this an idea
that is widely accepted?
J.T.: Frankly, we do get some hesitation about the concept. Not all
buyers are onto it. We can represent them in the real estate
transaction much like a lawyer or CPA, but there is some apprehension
about having a "salesperson" represent them. They don't understand the
process, because in over 95 percent of circumstances, my commission is
still paid by the seller. Buyers are not really out anything, so they
don't understand how they can really benefit. One thing we do as a
buyer's agent is negotiate our own commissions. If a buyer is having me
negotiate a FSBO [for sale by owner], I have him or her sign a buyer's
agreement that if the seller won't pay my commission, the buyer will.
But I have never had a situation in which a buyer paid the commission.
A.N.: What is the
agreement?
J.T.: It is legally binding and binds the buyer's agent to represent
the buyer and his or her interests, whatever they are, in the
transaction.
A.N.: How are buyer's
agents perceived in the real estate industry?
J.T.: There is a bit of an adversarial position that we have to take,
but it is becoming a very accepted practice. There is a feeling that we
are on opposite sides of the table, but that is not necessarily a
negative thing.
A.N.: Do they get as much
respect?
J.T.: Yes, definitely. You have to command that respect by providing as
much information to buyers as possible, so they go into the transaction
with their eyes wide open.
A.N.: Is there training
that you go through?
J.T.: Yes -- there is a designation called the Accredited Buyers
Representative, which shows that you have the training and education to
do a good job for the buyer. I have taken the course and am still
completing my qualifications to get this coveted designation.
A.N.: What got you
interested in representing the buyer instead of the seller?
J.T.: In our market, there are a lot of people relocating here, and
they are essentially shopping long- distance. They need to know that
someone is working in their best interests and is doing the things they
would have a hard time doing long-distance, like setting up services
for them. We also represent people locally who want these same services
because they don't want the headache of doing it themselves.
A.N.: How can buyers find
buyer's agents?
J.T.: Buyer agency is becoming more commonplace. If you aren't familiar
with it, ask about it. And ask Realtors in the community you are moving
to if they are buyer's agents or can put you in touch with one. You
don't know if you can have it unless you ask for it.