Buyer's Agent

So you want to buy a house.  Where do you begin?  You go online or grab the local swap sheet and start looking at houses?  Traditionally yes, and that may be a good way to start.  You familiarize yourself with prices and inventory... all good things.  Eventually you will want to get your own buyer's agent and get them under contract to represent you.

Now, do not just go out and grab the first one you talk to.  You should interview them and determine whether they understand their obligation to you.  The State of California has updated its agency laws in recent years and this has changed the way that agents treat their clients and customers.  All of it gets rather complex and it would be easier to draw diagrams at this point, which capability I do not currently have so... if you are really interested contact me and I will gladly draw you a picture (literally) of how the concept of agency works in a real estate setting.

For the time being I want to let you know about an agent's Fiduciary responsibility to you as a client.  Fiduciary is a term used to denote being in a position of faithfulness and trust, in real estate terms this is in regard to your money and real property interests.  As your buyer's representative I must place your financial interests above my own in regards to real estate.  That means that I have a legal obligation to use my expertise to counsel, warn and guide you in the purchase of property.  Even though I only get paid after you close escrow and I think I might be able to push you to buy this place that has a price tag on it that works for me I am legally bound to set my personal interests aside and do what is right for you.  (I would say that I am morally bound as well, because to me a clear conscience makes a great pillow and I love my sleep.)  But, this duty is owed only if we have a written agreement in place stating that I am representing you exclusively as a buyer.  Now, yes I would have to be honest about property details, but I do not have to go above and beyond to discuss your financial and property goals with you.  You would be on your own to figure that out... unless you have an agreement in place.

So if you go into the top Real Estate office in town and an agent shows you a bunch of houses, smiles alot and you end up feeling really great about the house that that agent is also listing... well don't.  Start by clarifying whose interests the agent is going to represent and get it in writing.  This legal relationship may change in the course of your house shopping and that is okay, but you deserve to understand why and how it changes.  Again the explanation is much easier with diagrams so contact me if you want to learn more.

Now how does your buyer's representative, who has stuck with you and guided you through the often murky waters of the property purchasing process get paid?  Well they will get paid from the proceeds of the purchase.  The commission is built into the price of the home and divided amongst all the agents and brokers who coordinate, generate, and maintain the legal documentation, professional relationships, licensing requirements etc. that allowed you to buy that property with all of the disclosures, title and contract insurance and legal protections in place to assure you that you now own, in fact, what you paid for and nothing more (termite infestation), or less. (missing square footage??)