Beware of what you read in the news lately. There are many false and misleading information in the news about the changes of buying a selling a home. Here are the facts from a leading Real Estate Professional.
HISTORY:
The practice of sellers paying the buyer’s side of the commission in the U.S. real estate market has deep roots. While recent legal challenges have put these practices under the microscope, it’s clear that this method offers multiple advantages for sellers and buyers.
In 1983, a Federal Trade Commission study revealed that more than 72 percent of homebuyers in the United States mistakenly believed that the Agent showing them homes represented their interests. As a result, laws requiring agents to disclose whom they represent have been passed across the country.
Real estate began in the early 1990s representing buyers with an exclusive buyer’s representation written agreement. Before then, buyers were often without representation, and listing agents only represented the seller's interests and it was a "BUYERS BEWARE" environment. Buyers were vulnerable to exploitation and disadvantage, and many struggled to afford both closing costs and agent representation and had nightmare situations with the homes condition not disclosed causing issues even after the sale. Sellers were also exposed to labilities by not disclosing properly property conditions, not having buyers inspections periods and resolutions upfront on any repairs, going under contract without property vetting the buyer, and having the potential the contract will fall apart and never close. This one sided situation caused both buyers and sellers to be exposed to labilities and a lot of headaches, and often left a lot of money on the table for both sides.
BUYING AND SELLING PROCESS:
The process because streamlined and efficient when both parties are represented by their owned licensed realtor. There are so many scenarios of how a transition can go bad, from inspections, not having qualified buyers, working through appraisal issues, and more. Having good representation can make the process seamless. People often do not see what goes on behind the scenes to get a transaction to the closing table, but a good realtor will guide you through the process, will protect your interest, will educate you on options, and will have a vetted listed of trusted vendors and resources, so you and your family will be able to concentrate on the important things like planning your move and moving on to your future.
You should not cut your own hair, pull your own teeth, you should not prepare your own taxes or represent yourself in court, so why would you not have a seasoned professional Real Estate agent represent you in the largest financial purchase that you will make?
From attracting more buyers to potentially fetching higher selling prices and ensuring a quicker sale, the benefits are significant. As the industry navigates these legal waters, understanding the rationale behind this practice helps in appreciating its value in the complex world of real estate transactions.
ADVANTAGE FOR A SELLER TO PAY A BUYERS AGENT:
- Increased buyer interest:
- When sellers cover the commission, the property becomes more attractive to a broader range of buyers. This is particularly beneficial in competitive markets, where every advantage counts.
- Potential for higher selling price:
- Because buyers don’t need to reserve funds for commission, they might be willing to offer a higher purchase price.
- Faster sale of property:
- By removing the extra financial burden on buyers, sellers often enjoy quicker sales, reducing the time their property spends on the market.
- With more buyers, sellers may receive offers faster. By putting pressure on the market you will have buyers who will act faster to bring a strong offer.
- This is basic economics. A larger pool of prospects will increase your profits and result in a faster sale. An average home should be under contract within 30 days, after that your changes of selling will decrease and so will your profits.
- Simplified negotiation process:
- With commission costs off the table, negotiations can focus squarely on the property’s price, streamlining the discussion.
- Reduced financial burden on buyers:
- This approach makes properties accessible to a wider pool of buyers, some of whom might have limited available cash for upfront costs.
- Enhanced seller reputation:
- Sellers who cover commission costs are often viewed as more motivated and cooperative, traits that can attract serious and qualified buyers.
- Streamlined transaction process:
- The transaction becomes less complex with fewer parties negotiating over commission payments, leading to a smoother overall experience.
- The money is already in your home.
- When you purchased your home your buyers agent was paid by the seller, whether is was a new construction or pre existing home, changes are you used a buyers agent to help you purchase you home, so pay the money forward. Your home was appraised with that commission included.
- Buyers struggle to pay for down payments, closing cost and moving expenses. The available cash is in the sell for the transaction, many buyers my struggle to have funds to close and this could cause contracts to not close.
Beware of Agents who tell you that you do not need to cooperate with a Buyers agent, it is in your best interested to ensure that both parties are both represented to negotiate a smooth closing. The waters are a bit murky right now, and there will be those who will try to take advantage of the situation and not fully educate you on these points of selling your home by a professional.
ADVANTAGE FOR A BUYER TO PAY A BUYERS AGENT:
Agents can spot red flags. You might say home buying without a buyer’s agent is a little like grilling tenderloin without a meat thermometer: you might not know there’s a problem until you’re sitting at the table. Working with an experienced buyer’s agent can make it easier to identify and navigate issues early in the process.
A buyer's agent is committed to representing you. Both agents can set up house tours, but unlike the listing agent who represents the seller, a buyer's agent protects the buyer's interests during the crucial negotiating and closing process. The agent bargains with the seller on the selling price, facilitates the home inspection, negotiates contingencies and assists the buyer through the closing paperwork.
- Expert Market Knowledge
- A buyer's agent has an in-depth understanding of the local real estate market.
- They stay up-to-date with the latest listings, market trends, and neighborhood information. This expertise allows them to identify properties that match your specific criteria and budget, often before these homes are widely advertised.
- Skilled Negotiation:
- A buyer's agent can negotiate the selling price, contingencies, and other terms on behalf of the buyer. They can also help protect the buyer from overpaying for a home.
- Buyer’s agents are skilled negotiators who know how to craft offers that are attractive to sellers while protecting your interests. They can advise you on the right price to offer and help you navigate counteroffers, ensuring you get the best deal possible.
- Guidance:
- The process of buying a home involves a significant amount of paperwork and legal documentation. A buyer's agent guides you through this complex process, explaining each step and ensuring all necessary forms are completed accurately and submitted on time. This guidance helps prevent costly mistakes and delays
- A buyer's agent can provide advice on local markets, pricing, neighborhoods, and other real estate matters.
- They can also help with property details, investments, HOA rules, and other buyer questions.
- Access:
- A buyer's agent can be available to answer questions, show properties, and address concerns. They have a pool of trusted vendors to help with any needs, they spend their days and nights pouring over new listings, studying neighborhoods, they invest in websites and tools to make the home buying process simple and easy
- Navigating the Complex Nashville Market
- Nashville's real estate market is complex, with a variety of property types ranging from high-rise condos downtown to rural estates.
- A buyer's agent with local expertise can help you navigate these diverse areas, understanding the nuances of each neighborhood.
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- Their access to comprehensive market data and connections within the community can give you a competitive edge to understand your needs.
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- Home inspection:
- A buyer's agent can facilitate home inspections.
- Appraisals:
- Often working through getting a home to appraise and what your options are if it doesn’t isn’t an easy process. Buy having the right representation your agent can guide you through the process.
- Closing:
- A buyer's agent can help the buyer with closing paperwork and working with trusted title companies. Making sure you have clear title, that all inspection issues were resolved, and can help you ensure the home is negotiated and closed with your best interest.
- You will not want to experience issues post-closing, it is much harder to deal with this issues after the sale.
I hope this find this information helpful when making a decision about working with a Real Estate agent. For a more in-depth conversation on what is right for you, call Wendy Dyes at 615-807-0340 to help guide you through the process.