Buying a home is one of the most significant decisions you’ll make, both financially and emotionally. If you’re a first-time buyer, you may be excited about transitioning from renting to owning, but you might also feel a bit overwhelmed by the process. Relocating or move-up buyers may have some experience, but it can be helpful to refresh your knowledge on the intricacies of home buying.
The homebuying process is complex, and the market can be competitive. To navigate this journey effectively, having a trusted advisor is essential. Here are a few reasons to hire a buyer’s agent:
- Expertise in Real Estate: Buyer’s agents undergo training in California real estate and are well-versed in the contracts used in transactions. The standard residential purchase agreement, for instance, is 17 pages long and just one of many forms you’ll encounter. Your REALTOR® learns about these forms and more from local, state, and national real estate associations.
- Understanding Homeownership Costs: While your lender will provide a good-faith estimate of your purchase costs, your REALTOR® will help you understand the broader financial picture of homeownership. This includes not only the home price but also taxes, insurance, potential HOA fees, and maintenance costs.
- Tailored Home Searches: A buyer’s agent has access to the MLS (Multiple Listing Service) and can help you find homes that fit your needs and budget. They’ll schedule showings and provide professional insights, helping you evaluate the pros and cons of each property.
- Market Knowledge: A buyer’s agent understands the local market thoroughly, enabling them to direct you to homes within your price range. They can compare potential homes to others in the area and may suggest neighborhoods you hadn’t considered.
- Identifying Issues: While appealing photos can mask problems, a buyer’s agent can spot red flags that you might overlook.
- Crafting Competitive Offers: Making a competitive offer involves more than just price. Your buyer’s agent will help you navigate terms such as rent-back clauses, escrow periods, and all-cash offers, ensuring your offer is strong and attractive to sellers.
- Effective Negotiation: Your buyer’s agent will advocate for you throughout the offer and escrow processes, negotiating various aspects including price, inspection terms, home warranties, and necessary repairs. They will guide you in determining the best approach for each situation.
- Protecting Your Rights: REALTORS® are educated on fair housing laws and know how to help you avoid potential pitfalls. They can also assist you in addressing any issues that may arise.
- Network Connections: Whether before or after your purchase, your buyer’s agent can connect you to reliable professionals for home repairs, maintenance, and other services, ensuring you have trusted resources at your disposal.
*** Important Industry Changes ***
Beginning August 17, 2024, ALL homebuyers must sign a Buyer Representation Agreement with a real estate agent BEFORE viewing any homes. While it’s possible to sign a one-time agreement for a single showing, it’s wiser to select an agent early and establish a trusting relationship. This allows the agent to fully understand your needs and provide expert guidance throughout the process, ensuring you receive the best advice and representation. So, don’t just focus on finding the ideal home—take the time to find the right agent as well!
We’ve included a few very important links to the new changes, requirements and information:
FAQs: Hiring a Buyer’s Agent and Associated Costs
Should I hire a buyer’s agent?
Absolutely! Partnering with a buyer’s agent is highly advisable. They will help you navigate the home buying process, negotiate on your behalf, and ensure you get the best deal. The buyer agent commission is typically covered by the seller, but not always.
What is the cost of a buyer’s agent?
A buyer’s agent usually charges a commission of about 2.5% to 3% of the purchase price, which is typically paid by the seller as part of their closing costs. However, there may be situations where the buyer needs to pay their agent directly, which can affect property marketability.
What does the new law say about commissions?
The new law aims to provide sellers and buyers with more flexibility regarding the payment of the buyer agent commission. Sellers can set the amount offered to the buyer’s agents, and while a standard commission of 2.5% to 3% has been common, lower offers may lead to fewer showings. The new law also requires agents to have Buyer-Broker agreements in place BEFORE showing homes.
If I sign a buyer-broker agreement, am I locked in with my agent?
No, you’re not locked in. Most buyer-broker agreements include cancellation options if you’re not satisfied. Depending on whether the agreement is exclusive or non-exclusive, you may be able to terminate it immediately or within a specified period. Be sure to review the terms carefully to understand your options.
For the latest changes and more information, please check the links provided above.