What do real estate buyer’s agents do anyway?
When purchasing a home, about 87% of home buyers work with a realtor according to National Realtor’s Association’s survey. Having a real estate agent working on the buyer’s side can be very helpful from showing a big list of different properties, proper due diligence, and negotiation only on behalf of the buyer. Real estate buyer’s agent gets paid after closing by splitting the listing agent’s commission the seller has already agreed to pay in writing. If the listing agent represents both buyer and seller (dual representation), the entire commission will belong to the listing agent after closing in most market places including Portland, OR. So a home buyer is not paying for the buyer’s agent one way or the other. What do real estate buyer’s agents do anyway? Below describes some of the work done by such agents. At least that’s what I do for my buyer clients as a real estate buyer’s agent.
Real estate buyer’s agents work exclusively for the buyer. First the agent finds out whether the buyer can qualify financially to purchase a home and find out what the buyer is looking for. The agent can also advise on which lenders are good or not. Once the pre-approval letter is submitted with an offer, you can’t change the lender unless the seller agrees so it’s important to do your lender shopping before you start your home shopping. After that, the agent and the buyer come up with a list of homes to go see. The buyer’s agent arranges all the home showings by making appointments for owner occupied properties. If the agent is good, then you will also receive information on what the comparable values are so you know whether a property is a good deal or over-priced. A buyer’s agent can also point out some obvious issues with the property such as whether the roof looks old, whether the structure seems to be sagging, and other obvious issues. Moreover, the agent should be able to advise the home buyer on the neighborhood, safety, school quality and more.
Once the buyer decides to put an offer on a property, the real estate buyer’s agent should be able to advise on the real value of the home by comp analysis and how long the home has been sitting on the market. Then the agent can recommend an offer price that is reasonable but making sure the buyer is not over paying for anything. In a slow market when a home sits on the market for more than two months, the buyer’s agent should be advising the buyer client to offer less than the asking price. How much less will depend on each specific case.
The buyer’s agent then puts together an offer with the buyer’s mortgage pre-approval letter or a proof of funds. Once the offer is submitted, the negotiation begins until the parties come to an agreed price. After the contract is executed, the buyer’s agent contacts an escrow agent to open a new file and compile all the deadlines for action items according to the contract. The agent helps going over the disclosure document with the buyer; help coordinate inspection; go over title report (not all agents do this); and communicate with the seller’s agent on any issues that need addressed. Then the buyer’s agent attends the inspection and help with the final inspection negotiation between the buyer and seller based on the inspection report.
The buyer will also be working with the lender at this point proceeding with the loan submitting any necessary documents. The buyer’s agent also works with the lender to make sure there are no issues with the contract and any addenda that will raise any red flags with an underwriter. If so, the agent will work to make sure the agreements will comply such as clarifying the verbiage of the addendum, providing any additional agreements the parties have executed.
Then there will be an appraisal ordered by the lender. Depending on what the appraisal value is, further negotiation may be necessary. That means working with the lender again to update the contract or rearrange financial structure of the deal, which can take a few more days. That means, closing day should be extended as necessary.
Real estate buyer’s agent works hard to make sure everything goes smoothly from the beginning to end on behalf of their buyer client. Once in a while, the deal falls through and the agent must put aside any personal interest in the transaction and stay loyal and cares about the best interest of the buyer, which means the agent must not have any issues in moral turpitude.