Questions & Answers
Is the agent who shows me homes representing me?
Probably not! Unless you have an agency agreement with a promise of representation, the agent showing you homes will be acting on behalf of the seller. Sellers who “list” their homes for sale have signed a listing contract with the real estate company. The listing contract obligates the real estate company, and all of the firm’s agents, to represent the seller in the transaction. This same contract permits the listing agent to use “sub-agents” to help find a buyer. The sub-agent may even be from a different real estate company. The sub-agent’s role, just like the listing agent’s role is to get the highest possible price and best terms for the seller.
Can real estate firms that list homes for sale represent homebuyers?
With increasing demands for buyer representation, traditional listing companies are trying to find a way to represent buyers. However, they have a serious problem. Agents with large brokerage firms are unable toexclusively represent homebuyers because they are already obligated to represent the seller on all company listings. The listings belong to the real estate company and all the agents affiliated with that firm are bound by the promises of their company. One of those promises is to get the highest prices and best terms for the seller. The traditional real estate company simply cannot obtain the highest price for the seller and get the lowest price for the buyer.
What is meant by the term “buyer’s broker”?
A buyer’s broker is a real estate broker, or agent, who represents the interests of a purchaser instead of a seller. The buyer is the client of the agent. The buyer’s broker has a legal obligation to obtain the best price and terms for the homebuyer.
What is the difference between a client and a customer?
The difference is in the representation. An agent is an employee of a client. The agent owes the client fiduciary duties that can be summarized by the initials T.L.C. – trust, loyalty and confidentiality. If you are not the client, the agent will treat you like a customer. “Buyer brokers will better represent the interests of buyers than will sub-agents. They are more likely, for example, to negotiate a lower sales price on a house.”- American Association of Retired Persons
My agent says she represents the seller but promises to be fair and “take care of me.” Isn’t that all I need?
Since the seller is her client, she is not allowed to negotiate on your behalf. It is unethical for a seller’s agent to suggest that a buyer make an offer below the listed price or advise the buyer to negotiate for other concessions from the seller. A REALTOR is bound by the Code of Ethics to treat all parties honestly. Honest treatment is significantly different form being represented by an advocate actively negotiating on your behalf. If the agent doesn’t have you for a client, she has the seller for one, and she is obligated to tell her principal everything she knows that will strengthen the seller’s position.
What if I need more help?
In other words can the traditional seller’s agent negotiate FOR me? … not legally. A sub-agent would be liable for any breach of duty to the seller if they helped you in any way that is not in the best interests of the seller. For example, a seller’s agent will not suggest that you write an offer that requires the seller to pay mortgage discount points or make repairs to the property.
I recall one agent that claimed to represent both the buyer and the seller. Is that what we call a “dual agent?”
Yes. Beware of any agent who offers to function as a “dual agent” or “double agent”. Everyone knows you cannot serve two masters. Check with a good real estate attorney before you get involved. If you do accept this arrangement, be sure that you demand a strong reduction in the commission. After all, you will suffer a reduction in the services. Many traditional real estate companies have a commission structure that includes an incentive for the agent to sell their own company listings. If the seller has a representative you should have one too.
Do I really need my own agent?
Yes – it can make a big difference! Consider this. When a famous sports personality like Michael Jordan enters contract negotiations with the team management, does he use the team’s agent? Certainly not. Michael hires his own agent. If you were the defendant in a lawsuit, would you use the plaintiff’s attorney for your defense? Of course not! In the real estate market, we have a very similar situation. Without an agreement to the contrary, all real estate agents represent the seller.
With today’s disclosure laws, is there any reason to worry about representation?
In 1983, the Federal Trade Commission found that more than 70% of all homebuyers mistakenly believed the agent showing them homes was representing them. As a result, most states enacted consumer protection laws that required real estate agents to disclose, to consumers, who they represent. In 1992, a study by the Consumer Federation of America, an organization of 250 pro-consumer groups, found that homeowners overpay for their houses primarily because there was poor compliance with the new disclosure laws. Then in January of 1994, Oregon enacted new legislation that elevated the standards of the consumer disclosures. Several new forms were also specified in the new legislation. Unfortunately for consumers, the forms were vague and poorly understood by most agents. The forms fail to indicate that the consumer has a choice about representation and rarely will an agent suggest alternatives that would enhance the consumer’s position at the expense of the agent. Too often, the forms are thrust upon the consumer with the false notion that the consumer’s agreement is mandatory.
So what should a homebuyer do?
Hire your own agent! Put an expert buyer’s broker in your corner with Optima Properties, practicing Exclusive Buyer Brokers since 1985.
How much does it cost to have the services of Optima Properties?
Nothing extra. After hearing about all the wonderful services and advantages available, as a client, you would expect to pay a premium fee. Homebuyers are often surprised to find that using the services of Optima Properties, will not increase their costs. In fact, most buyers find that we can help save them thousands of dollars in real estate costs. Our compensation comes from the proceeds of the transaction, unless you choose otherwise. This means that the buyer does not need to bring any extra money to closing.
Can Optima Properties help me by negotiating a lower price?
Yes, we can. We work exclusively for buyers. We never represent sellers. In fact, in a recent study of purchases where the buyers used a buyer’s broker, it was found that the average savings was between 2 and 4 percent of the price. Do you want to take advantage of these savings?
If you work for a commission, why would you try to lower the price of a home for me?
For every $1000 that Optima Properties can save you on the price of the home, it typically reduces the commission by about only $30. We will gladly help you save thousands of dollars because our business depends heavily upon referrals from happy clients, not to mention the fact that we are legally required to work for the best interests of our clients. In fact, many of our clients have been so pleased with our services; they have actually given us bonuses after closing!
Does Optima Properties have access to all resources like the Multiple Listing Service?
Absolutely yes, and more! We are members of the local board of REALTORS and subscribe to the MLS service. Our office features a high-speed computer with 24-hour access to on-line databases of property information. We can often tell you what the seller originally paid for the house. We are constantly monitoring new homes offered for-sale-by-owners and builders. Unlike a traditional firm, we also enjoy easy access to every home offered for-sale-by-owner. In some situations, we will even conduct property searches among homes not even offered for sale. We can also help new construction buyers choose lots and select builders for custom built homes. You will find that we work hard to find the right home for you.
How does Optima Properties save money for the buyer?
Of course, one way buyers can save money is on the purchase price of the home. We always conduct a thorough analysis for our client and share with you complete information about property values to help you determine a fair price. Usually that analysis suggests a value below the list price. We also discuss with you the seller’s motivation to accept a lower price. We always negotiate and work in the best interests of the buyer. With Optima Properties, you will never unknowingly overpay for a home. In addition, we can help you shop for mortgages and homeowners insurance. At Optima Properties, our client’s personal and financial information remains confidential and is not shared with anyone without the client’s consent. This is certainly to the buyer’s advantage during negotiations. Law requires traditional seller’s agents to disclose any information about you to their client, the seller.
Who works harder, the buyer’s agent or the seller’s agent?
Whether an agent is working for the buyer or seller, both sides work hard to make the real estate transaction happen. The seller’s agent works to put the home in the most favorable position to sell quickly and at the highest price possible. The buyer’s agent works to find the buyer the best home in the market that will fit their needs and at the lowest price. The skill at negotiating the contract separates the professionals from the part-timers, for it is negotiation that keeps the deal from falling through.
Who pays the Buyer Agent’s commission?
Sellers agree to pay a total commission to sell their home when they enter into a listing agreement with a listing agent. If more than one agent is ever involved, the existing total commission the Seller has “already agreed to pay” is split between the Seller’s Agent and YOUR BUYER agent. Also, since sellers agree to pay a total commission, which may be split between any agents involved, you don’t pay any more for your OWN agent. That means that a Buyer’s Broker can represent the BUYER’s interests at NO ADDITIONAL COST to the BUYER!
So just how do the services of a traditional agent compare with that of Optima Properties?
Let’s examine what a traditional seller’s agent can do for a buyer. Seller’s agents provide some services to the buyer since they want to “make the sale.” They are allowed to:
- Provide information about MLS listed properties only
- Provide information on sources of financing
- Show you properties and highlight the features
- Disclose material defects only
- Promptly submit your highest purchase offer
- Respond honestly to questions without compromising loyalty to the seller
- Comply with fair housing regulations
Let’s look at some of the ways Optima Properties, as your Exclusive Buyer’s Agent can help you.
- We can provide all the service of a traditional seller’s agent PLUS;
- Pledge to represent you!
- Work on your behalf at all times!
- Provide complete obedience, within the bounds of the law!
- Prepare, discuss and interpret market statistics for you!
- Help you determine the most favorable mortgage for your situation!
- Search all available properties, including those offered FOR SALE BY OWNER and others!
- Locate, preview and show targeted properties!
- Provide you with a current map of the area!
- Openly discuss the flaws and features of every home!
- Perform a competitive market analysis of chosen properties!
- Advise you on an initial offer price and negotiating strategy!
- Help you write an offer with favorable purchase terms
- Prepare an accurate estimate of all closing costs!
- Conduct your offer presentation in a professional manner!
- Negotiate with the seller or builder on your behalf!
- Keep your information and negotiating agenda confidential!
- Consult and advise you about any counteroffers!
- Help with the selection of a title company!
- Help you arrange a professional property inspection!
- Shop the loan package with lenders for favorable loans!
- Verify that all negotiated repairs are properly completed!
- Help you get all important documents examined by an attorney, if needed!
- Review closing statements and documents for accuracy!
- Provide complete loyalty to the buyer!
What kinds of property can Optima Properties help me buy?
We can help you buy single-family homes or duplexes, existing or new construction, town homes or condominiums, rental property, investment property, commercial real estate or raw land.