The Myth of Going Solo - Why Home Buyers Shouldn't Skip Using A Buyer Agent

Recently, there has been extensive discussion on the radio, television, newspapers, and online about the latest settlement proposed by the National Association of Realtors concerning the payment of buyer agents. Having been a full-time Realtor since 1996, I've witnessed numerous changes, and indeed, this is another significant one.

If you're a homebuyer, you might perceive this proposed settlement as beneficial, potentially allowing you to purchase a home for less than the current market prices.

Should the court approve this settlement, it will bring about several changes. A notable one is the requirement for a signed Buyer Agency Agreement before any house viewings with a Buyer Agent. The Buyer Agent's compensation will no longer be listed in the MLS, which means an agreement on payment must be made upfront between you and your Buyer Agent. Although the settlement doesn't prohibit sellers from paying a Buyer Agent, it also doesn't mandate it.

The Buyer Agency Agreement will now include a section where your Buyer Agent discloses their fee for representing you upfront. It's important to understand that if the compensation offered by the seller is less than your Buyer Agent's required fee, you'll need to decide how to proceed. You may choose to cover the difference between the seller's offer and your agent's fee or instruct your agent not to show you properties where the compensation is below their fee. Discuss these options with your Buyer Agent before starting your home search.

It is possible that a buyer may decide to go it alone, for a lot of reasons:

BEING UNREPRESENTED MAY BE CHEAPER

You might think that by not hiring a Buyer Agent and instead using the Listing Agent for your purchase, they would reduce their commission, as there's only one agent involved in the transaction. However, caution is advised—purchasing a home is a significant financial commitment with many intricate details in the process. Unforeseen issues can arise from the contract to closing, and a dedicated Buyer Agent will be there to assist with any problems that occur. There's no certainty that an agent will lower their commission. Should the listing agent also represent you, it results in Dual Agency representation, and in case of complications, it may become unclear whom the agent is truly representing. 

If the listing agent chooses not to represent you, or if you're dealing with a For Sale By Owner (FSBO), there are numerous tasks you'll need to handle yourself, tasks that a competent Buyer's Agent would typically manage for you:

• You'll need to gather all the information about the property. A Buyer's Agent would have access to extensive data from both the MLS and county records.

• You'll have to dedicate time to researching past home sales in the area and understanding neighborhood trends. While Zillow might list these, some sales may not be posted online!

• You'll need to identify homes you're interested in touring and reach out directly to the sellers if it's FSBO, or contact the listing agents to arrange walkthroughs. Remember, not all homes are open for viewing, and many may go under contract before scheduled open houses.

• You'll have to invest time in finding the right lender for your financial situation. Since lenders offer different loan programs, you might need to contact several to compare their offerings, closing costs, and payment terms.

• You'll require an attorney to draft your purchase agreement, or if the FSBO seller drafts it, you'll want an attorney to review it. However, an attorney won't provide advice on offer strategies or have insights into how many offers a seller has received or what incentives could make your offer stand out.

WE CAN EASILY FIND HOMES ONLINE!

Indeed, hundreds of websites list homes for sale, with Zillow and Realtor.com being among the largest. However, the reliability and accuracy of their information can be questionable. Not every seller chooses to list their property on these platforms. Properties in a 'Coming Soon' status are not posted online. Additionally, listings do not automatically transfer from the MLS to sites like Zillow; they must first be updated in the MLS, then on the individual broker's websites, before finally reaching Zillow. Smaller brokerages, in particular, may not update their listings on Zillow promptly.

WE ARE GREAT NEGOTIATORS!

Many individuals are skilled negotiators, yet successful negotiation for a house purchase requires keeping emotions at bay, particularly in a multiple offer scenario. A competent Buyer's Agent can be invaluable, providing insights into neighborhood trends and the dynamics of multiple offers without the emotional investment that a buyer or seller might possess.

WE WILL BE IN FULL CONTROL OF OUR HOMEBUYING PROCESS!

Having been a full-time Realtor since 1996, I've assisted hundreds of homebuyers. You might feel in control of the home buying process when all is well, but what if the appraisal is low? Or if you can't agree with the seller on an inspection repair? Are you aware of the necessary inspections to request? And what if a title issue emerges? Numerous potential obstacles could arise, and an experienced, full-time Buyer's Agent can help navigate and resolve these issues that might be challenging to handle alone.

SO WHY SHOULD WE USE A BUYER AGENT?

• Do you understand the Virginia Residential Disclosure Laws?
• Do you understand the contract and terminology in the contract?
• Do you understand the Homeowners Association Disclosure rules and regulations?
• Do you know about title and ownership issues?
• Do you know about zoning?
• Do you know about breach of contract?
• Do you understand price negotiation and fair market value?
• Will you be able to see potential defects and red flags in the property you are viewing?
• Do you have access to reputable service providers, such as contractors, inspectors, attorneys, lenders?

SO WHAT DOES A BUYER AGENT DO?

• They will find properties in your price range with the location & features you want.
• They will educate you on the real estate market & what you can expect.
• They will set up showings so you can tour potential homes.
• They will discuss your offer strategy.
• They will submit your offer to the seller/seller's agent.
• They will set up your home inspection.
• They will accompany you on your home inspection.
• They will advise on negotiating any repair addenda.
• They will assist with all the paperwork.
• They will recommend good real estate attorneys that will be able to close your transaction.
• They will be there to handle any hiccups or bumps along the road to closing.
• They will make sure that all real estate laws are followed.
• They will communicate with all parties involved in the transaction.
• They will be with you all the way through closing.
• They will be there with you after closing if needed.
• Most importantly, they will be your advocate for your interests and only your interests!

In summary, although the internet has provided home buyers with a wealth of information, the importance of professional guidance when buying a home cannot be overstated. Buyer Agents are instrumental in managing intricate legal contracts and securing the most favorable terms. They offer invaluable expertise and reassurance throughout the purchasing process. Wise home buyers recognize the advantages of engaging a competent Buyer Agent to fulfill their aspirations of homeownership.

As a Buyer's Agent in Richmond, Virginia since 1996, I've assisted hundreds of homebuyers in finding their ideal home. With numerous questions and uncertainties about the future, it's the perfect time to discuss how a skilled Buyer's Agent can support you in your real estate transaction. Don't hesitate to get in touch!