September 20, 2011

Buyer Representation (Buyer's Agent)

The age old question when buying a piece of real estate is "Do I need an agent to represent me as a buyer's agent or do I deal with the listing agent directly?" The listing agent is going to tell you that you as the buyer, do not need to have your own agent and you should use him.

As the listing agent sees this, there are two reasons that a buyer should not have a buyer's agent. One is that the listing agent does not have to deal with another agent making negotiations, which is less time consuming. The second is that the listing agent does not have to split the commission with the selling agent.

But before you get involved with a real estate transaction without a buyer's agent, ask yourself these questions:
  1. Are you familiar with the property type that you are thinking of buying?
  2. Are you familiar with the construction techniques used to build the building?
  3. Are you familiar with the zoning that is in place for the parcel?
  4. Are you familiar with the zoning what you are intending to use the parcel for?
  5. Are you good with reviewing contracts?
  6. Do you feel confident in your abilities to negotiate?
  7. Do you have good access to sales comparisons?
  8. Do you have adequate time to review all the information I have listed herein?
  9. Do you think you are being objective to the "deal"?
  10. Are you good at inspecting for hidden things in both the contract and in the real estate itself?
  11. Who wrote the contract?
  12. Who besides you is going to review the contract?
  13. If this is an investment property with an income, are you familiar with studying income statements?
  14. Are you familiar with cap rate and how they work?
  15. Do you know what cap rates are used for a property such is this?
  16. Do you know how to access what a property will appraise for?
  17. Do you feel confident in how to undertake the due diligence process?
  18. Have you done this kind of business in the city that the real estate is in?

If you cannot answer all of these questions with confidence, then you should consider using a buyer's agent. They are FREE for home buyers to use as their commission is built into the sales price of the home and is split with the listing agent's commission. Sounds like there aren't too many reasons not to use a buyer's agent.

For more information about this subject, you can email me directly at

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