Should you use a Buyer Agent when you buy a home? What is a Buyer Agent?
Almost an unknown term a decade ago, Buyer Agency has today become a common practice among real estate professionals nationwide. Ongoing consumer pressure to separate the simultaneous representation of both the home buyer and the home seller caused major changes to the structure of the real estate industry. According to the 2003 National Association of Realtors report, Profile of Home Buyers and Sellers, 63% of all home Buyers used a Buyer Agent, and most worked under a written Buyer Brokerage Agreement with their Real Estate Agent. The number of Atlanta Buyer Agents have been increasing over the past few years.
Most home buyers are not aware that if they are looking at homes with a Real Estate Agent, and they have not executed a Buyer Agency agreement with their Real Estate Agent, and there has been no agency disclosure to the contrary, the Real Estate Agent they have been working with is obligated to represent the Home Seller. This is even the case if the real estate agent has spent many hours with you understanding your needs, showing you homes, reviewed your financial information, and may have even written a purchase offer, and has not even met the Home Seller. It is in your best interests to have your Real Estate Agent sign a Buyer Agency Agreement.
When a home is listed for sale, it is listed with a real estate commission that is typically 6-7%. Half of that commission goes to the Listing Broker and the other half is allocated to a Buyer's Broker or Selling Broker. If a Home Buyer is not represented by a Real Estate Agent, the Listing Broker is entitled to 100% of the 6-7% commission and by Contract acts solely in the Home Seller's best interest unless otherwise disclosed. The Listing Agent is under no obligation to assist the Home Buyer in formulating a best price or pricing strategy. Therefore, in most cases, unrepresented homebuyers pay too much for a home and do not realize any commission savings since the Listing Agent keeps most or all of the 6-7% commission. This applies to both new home sales and pre-owned home sales.
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