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Advantages of Using a Buyer's Agent to Purchase a Home

 

Buying a home, especially in the St. Louis, MO housing market, can be more complex than it appears, especially for newcomers.

While the wealth of online information and ease of home searching may seem enticing, relying solely on these resources may not be the best approach. It's crucial not to go it alone.

• A buyer’s agent can greatly benefit you in this process, and the best part is, their fee is typically paid by the seller, as provided for in the listing agreement.
• With years of experience and a track record of successfully selling hundreds of properties, we possess the expertise to guide you seamlessly from your current situation to your desired outcome.
• As seasoned professionals in residential home sales, we'll not only enhance your home buying experience but also share strategies to help you save money throughout the process.

Your buyer’s agent is your most essential resource when purchasing a home. Don't just hire the first agent that you know – choose an experienced agent with reputable credentials and a demonstrated history of assisting clients effectively.

Choosing A Buyer's Agent

Important Topics to Review

1. Buyer Agency Basics
2. What You Should Know About Buyer Agency
3. Buyer Representation: FAQ
4. Will Working Directly with the Listing Agent Help a Buyer?
5. Buyer’s Agents: Can Give Homebuyers a Competitive Edge
6. Don't Miss Out by Using Multiple Agents
7. Key Areas Where a Buyer’s Agent Can Offer Assistance

1. Buyer Agency Basics

Real estate agents in the state of Missouri are bound by license law to be fair, honest, and skilled in the delivery of real estate services. In addition to these and other basic standards, the buyer agency agreement outlines the specific additional duties that are owed to buyer clients.

• Under Missouri state license law, an agent's default relationship is with the seller, even if they are not the listing agent.

When you enter into a buyer agency agreement, you create a client relationship with our real estate brokerage. As our client, you receive some very important benefits.

Important Buyer Agency Benefits

1. We offer expert advice tailored to your transaction. For instance, as our buyer client, we can provide our professional assessment of a property's true market value.
2. We exclusively represent you and prioritize your interests. As our client, it's our responsibility to advocate for your goals above all others involved in the transaction.
3. We advocate for you during negotiations as per your instructions. Alongside negotiating the purchase price, we assist in formulating contingencies such as earnest money, financing terms, inspections, and testing, ensuring that your offer aligns with your priorities.

2. What You Should Know About Buyer Agency

• A buyer's agent represents your best interests and holds a fiduciary responsibility solely to you, not the sellers.
• Interview agents until you find someone you trust and feel comfortable with; possessing a real estate license doesn't guarantee competence, especially in a competitive market.
• Experience is key, particularly in navigating multiple offer scenarios; agents adept with technology can expedite document signings, enhancing your chances of success.
• Look for an agent who actively searches for homes beyond the multiple listing service, tapping into off-market opportunities.
• Timeliness is crucial in viewing homes, given the low housing inventory and potential competition; an agent's availability to show new listings promptly can be decisive.
• Don’t hesitate to sign a buyer's broker agreement to receive preferential treatment from an agent you are committed to exclusively, the buyer's agent's commission is covered by the listing brokerage.

If you haven't committed to an agent, we invite you to explore exclusive buyer's agency representation with The Schott Group & MORE, REALTORS. Contact us at (636) 489-1820 or Contact Us with any questions, or if you would like us to represent you.

3. Buyer Representation: FAQ

1. How long does a buyer agency agreement last? The duration of the agreement is flexible. You have the freedom to choose a timeframe that suits your needs and circumstances.
2. Who pays a buyer agent's commission? In almost every sale the seller pays the buyer agent's commission. The commission amount offered to the buyer’s brokerage is specified for all properties listed on the local MARIS MLS (Multiple Listing Service), ensuring that your agent's commission is paid.
3. Do FSBO sellers pay the buyer agent commission? Most "for sale by owner" sellers do pay the buyer agent's commission, although there may be exceptions. We can address the handling of commission for this minority of transactions in your agreement.
4. Do I need a signed buyer agency agreement to schedule a property showing? No, you do not need an agreement in place for our first property showing. At The Schott Group, we prioritize providing service first. We aim to understand your real estate goals and earn your trust before formalizing our partnership through a signed agreement.
5. I just met my agent for the first time at a property showing. Can my agent provide a professional opinion of a home's true market value during a showing? Under Missouri state license law, the agent's default relationship is with the seller, even if they are not the listing agent. Therefore, without a buyer agency agreement in place, the agent cannot offer a professional price opinion or negotiation strategy.
6. Can my agent provide market data before signing a buyer agency agreement? Yes, your agent can supply sold listing and market data, but they cannot offer advice on interpreting the data until a buyer agency agreement is established.
7. Should I work with the listing agent to draft my offer if I like a home? While it's possible to submit an offer through the listing agent, remember the listing agent works for the seller and their best interests - we recommend working with a buyer agent who will prioritize your best interests rather than the seller's.
8. Is a buyer agency agreement necessary to submit an offer? While not mandatory, all our clients choose to sign the agreement as they value the advocacy and advice that comes with buyer representation.

4. Will Working Directly with the Listing Agent Help a Buyer?

Avoid the temptation to contact the listing agent directly.

• There's a common misconception among some buyers that directly engaging with the listing agent provides them with negotiation leverage or insider knowledge, leading them to believe they'll secure a better deal on the home. However, these notions are far from accurate.
• The listing agent represents the sellers, and any information shared with them will be disclosed to the seller.
• While some agents may attempt to represent both sides, it's important to recognize the inherent conflict of interest this poses. This applies to new home construction also – Read Buyer’s Representation for New Construction Tips

While buyer’s agents safeguard the interests of buyers, seller’s agents prioritize the seller’s interests, aiming to secure the highest possible price for their home.

• Buyers who engage directly with the seller’s agent risk overpaying, as well as negotiating terms that favor the seller.
• Working with a buyer’s agent can help mitigate these risks by assisting in negotiations to ensure a fair price and favorable terms for the buyer.

It’s important to note that the commission paid to the listing agent by the seller is typically predetermined in the listing agreement.

Regardless of whether the buyer is represented or not, the seller typically owes the same commission to the listing agent.

5. Buyer’s Agents: How They Give Homebuyers a Competitive Edge

When the real estate market favors sellers, numerous homes are sold through multiple offers or bidding war scenarios. Despite the common belief that the highest offer always prevails, this is not always the case.

• In instances where the seller’s agent has extensive experience and prioritizes the seller's interests, they may opt to accept a lower offer if it proves to be the most robust.
• Buyers who are represented by seasoned buyer’s agents are typically equipped to present the strongest offer to sellers.
• These agents ensure that buyers have a solid pre-approval letter, work with reputable lenders, and provide the seller’s agent with confidence in the reliability of their offer.

Not hiring a buyer’s agent can end up costing the buyer money. In a competitive market, the rapport between the buyer’s agent and the seller’s agent can significantly impact the outcome, especially in multiple offer situations.

• Experienced buyer’s agents excel at communicating effectively with seller’s agents, making their offer more appealing compared to other strong offers.

For instance, if another buyer offers slightly more but their mortgage lender issues weak pre-approvals and their agent has poor responsiveness, the seller’s agent may advise disregarding that offer.

Consequently, the buyer represented by a superior agent will likely save money by not having to outbid the other offer.

6. Don't Miss Out by Using Multiple Agents

Every day, we receive calls from buyers who have registered on our website and are eager to view properties. Our initial inquiry is simple: "Are you currently working with a real estate agent?"

• Surprisingly, many individuals express reluctance to commit to a single agent. Upon further exploration, these buyers often reveal their fear of missing out on the perfect home by sticking with one agent.
• They believe that engaging with multiple agents will yield better results. However, this misconception couldn't be further from the truth and may actually hinder their search for the right property.

As busy real estate agents we have limited time available each day. In a market with limited inventory, our primary focus must be on our clients.

• Clients are defined as buyers who have entrusted us with finding their ideal home by signing an Exclusive Buyer's Representation Agreement. This agreement ensures that we prioritize their interests above all others, including customers and consumers.

Additionally, it guarantees compensation for the services we provide on their behalf, as Buyer's Agents are compensated by the seller's Listing Brokerage.

7. Key Areas Where a Buyer’s Agent Can Offer Assistance

Extensive Experience in Property Buying

• Market insights: Recognizes trends in home values, new developments, buyer demand, and the overall market condition.
• Buyer's agents are seasoned professionals in the business of buying properties.
• They guide you through the entire buying process, steering clear of common pitfalls that inexperienced buyers may encounter.
• Drawing from their wealth of experience, they know what to look for, what questions to ask, and have encountered various scenarios before.

Research That Saves You Money

• While online real estate platforms offer a glimpse into available properties, determining their true value requires thorough investigation. Your agent will conduct this research, leveraging their expertise and saving you time.
• Research pertinent information about neighborhoods, including details a seller might overlook but are crucial to your decision-making process. Your agent can provide insights you may not have considered.
• Immersed in the property market, buyer's agents possess firsthand knowledge of its dynamics.
• Particularly valuable in fluctuating markets, their insights can help you avoid overpaying for properties.
• Selecting a buyer's agent familiar with the local area ensures accurate advice, steering you away from unrealistic deals.

Professional Negotiators

• Offer Price – Help determine the value of a home and suggests a competitive initial offer.
• Negotiation plays a pivotal role in the buying process, and expertise is key to success.
• Buyer's agents adeptly handle negotiations, communicating with selling agents and vendors while knowing when to assertively proceed or tactfully pull back.
• Having a buyer's agent advocating for you is crucial, especially when the seller is represented by a skilled negotiator.

Keeping Emotions in Check

• Whether purchasing a home or investment property, emotional attachment is natural.
• Buyer's agents offer a rational perspective, objectively evaluating whether a property aligns with your needs.
• They provide constructive, impartial insights, identifying blind spots and helping you make informed decisions devoid of emotion.

Skills That Reduce Your Stress

• Property acquisition can be emotionally taxing and draining.
• Buyer's agents alleviate stress by navigating the process efficiently, conversing fluently with agents, and filtering out noise from the market.
• Guide you through the home inspection process and negotiate repairs or credits with the seller on your behalf.
• They enable you to focus on pertinent information, shielding you from unnecessary distractions.

Time-Saving

• Time is precious, and buyer's agents streamline the property search, freeing up your time.
• They conduct extensive groundwork, filtering out unsuitable properties and presenting only those aligning with your criteria.

Industry Knowledge Levels the Playing Field

• Selling agents prioritize the seller's interests, necessitating representation for buyers.
• Buyer's agents provide invaluable support, offering insights and strategies to ensure a fair deal.

Industry Contacts Widen Your Options

• With access to all properties for sale, buyer's agents also uncover off-market opportunities.
• Leveraging their network, they provide access to various professionals and resources, enhancing your buying experience.
• Professional recommendations: Provides referrals to reputable professionals such as lenders, attorneys, contractors, and other service providers.

STEP 6: Important Considerations When Choosing a Lender

 

• Please contact Dave Schott with any questions or to start the homebuying process. Call/Text  (636) 489-1820 or submit Contact US form.