Below are answers to commonly asked questions about the homebuying process and buyer's agents. If you have a particular question about buying a new home, please feel free to contact us!
Absolutely not. We will refer you to service providers who have proven themselves in the past, and have done a good job for previous clients. You are always welcome to choose your own service providers. We stand ready to help in that process, but we don’t require you to use any particular provider, and we receive no compensation from any provider.
We include a clause in the agreement that allows you to cancel the agreement if you are not satisfied for any reason. We also reserve the right to cancel the agreement if we find that a client wants to do something unethical, or if they are not cooperating with the process we’ve established to create a good result for all involved. Of course, the agreement also provides that if you cancel the agreement and then purchase a house that we’ve shown you within a certain period of time, we still get paid our fee.
No. We are paid only when there is a successful closing.
No, unless a client prefers to pay our fee themselves instead of having it paid from the proceeds of the sale.
Yes. We call it an Exclusive Buyer’s Agency Agreement. We believe that it is very important that both of us have very clear expectations on what will happen in your home-buying process. It will spell out each of our duties and responsibilities, and set a time frame for our representation. You will know exactly what we will do for you, what the cost will be, and how that will be paid (typically not by you.) The agreement also protects us to ensure that after we perform all these duties on your behalf, we can be paid from the proceeds of the transaction. We will review in detail the Buyer's Agency Agreement at our first face-to-face meeting.
It can be for any length of time, from one day to a few months. We generally recommend 90 days, but any time frame is fine.
The best time to engage the services of a buyer’s agent is before you begin looking for a home! Remember, listing signs and advertisements are placed by real estate companies that represent the Seller, so if you contact that agent they will represent the seller or be a dual agent. In most cases once an agent has shown you a property, even if they are the listing agent and therefore representing the Seller, they will be entitled to the commission – which will make it too late for a buyer’s agent to get involved – unless you want to pay them out of your own pocket. With a purchase of this magnitude, it is always best to learn as much as you can about the process ahead of time, and be sure a professional is on your side, and representing only your best interests.
It is not uncommon for a client to come to us with several houses in mind as possibilities. In fact, after gathering complete information, we will usually add several more possibilities for consideration, and encourage you to drive by them. The goal is to check out the condition of the property and the neighborhood, and to see if it’s conveniently located for your needs, etc. Once you have narrowed the options to your top 10 or so, we will schedule a tour to see the inside of each home, so that you can continue to narrow your choices.
During this process, we encourage you to continue driving around neighborhoods you like, to keep an eye out for new “for sale by owner” signs, and even attend open houses if you’re so inclined. All we ask is that if you attend an open house, you identify us as your representative to avoid confusion with other real estate agents you meet.
Once you’ve found the house you want to put an offer on, we will prepare a market analysis, help you decide on the price and terms of the offer, present the offer to the seller, help you find a home inspector, review the findings of the inspector with you, renegotiate the purchase offer based on the inspection (if necessary), and continue the process all the way through closing. So, in spite of who ultimately “finds” the house, the services of a buyer’s agent are invaluable.
There is still some argument that receiving compensation from the proceeds of the transaction – getting part of the commission paid to the listing agent by the seller – opens the possibility of conflict of interest because it may cause the buyer’s agent to settle for a higher sales price. However, you should realize that a $10,000 savings for our buyer results in only about a $120 - $140 reduction in commission for the exclusive buyer's agent. We believe that the future business we will be referred, as a result of your satisfaction with a job well done, is priceless! It’s certainly worth more than a few hundred dollars.
Our future depends on your total satisfaction and subsequent referrals to your family, friends, and neighbors. Besides, as a buyer's agent, it is both our legal responsibility and our goal to get the best price and terms we can for you. We enjoy the challenge, and we always put your interest above our own. That is the business we’ve chosen to be in, and the kind of agents we’ve chosen to be!
During a buyer’s market, it is not uncommon for highly motivated sellers to add bonuses to the agent who brings a qualified buyer. It would be an obvious conflict of interest if we did not tell you about the bonus being offered, so we will disclose that immediately. In fact, when we send you listings to look at, we send you the "Full Agent Detail" version of the listing - which is what the agents and brokers see. Any bonuses will be listed under "Agent Remarks" at the end of the listing - so you will see those when you review the listing. Nevertheless, we also specifically draw it to your attention if it's a house you become interested in!
If the selling agent is offering less than our normal fee as a share of their compensation, the bonus may be used to bring our earnings up to our agreed-upon fee. We often find, however, that the bonus is tied to a full-price offer on the property. Therefore if we bring an offer that will save you the most money possible (which is always our goal), the seller will often cancel the selling bonus in order to accept your offer. Through full disclosure and discussion, you will know that we didn't steer you toward a particular property because it had a bonus attached!
Unless you choose otherwise, our compensation comes from the proceeds of the transaction. Of course, you are welcome to pay our fees (typically 3% of the purchase price) yourself if you prefer. If you purchase a house listed in the MLS, the listing broker has already agreed to share the commission they earn from the seller with the broker who brings the qualified buyer to the table. (If the share they are offering is less than our customary 3% fee, we accept the offered share, and consider our fee to be paid in full. We never want our fee to be an issue in your getting the home you want!)
If you end up buying a for-sale-by-owner home, or a new home from a builder’s inventory, we will approach them ahead of time, and tell them that we have a pre-qualified buyer interested in a home similar to theirs. We will find out if they are willing to pay our fee on behalf of our client, if our client ultimately buys their home. So far, they have always been willing to do so, and that becomes part of the purchase agreement. If they were not willing to pay our fee, you would have to decide whether you want to move ahead with that home and pay our fee yourself, or go on to another home. If you decided to pay our fee yourself, our goal would be to help you negotiate a lower purchase price that would more than make up for it.
The process typically starts when someone has a house to sell. The seller contacts a real estate company or agent who will list the property in the MLS, put up signs, and spread the word in the marketplace that the home is available. The seller enters into a contract to pay a certain amount of compensation to that real estate company, often based on a percentage of the purchase price of the house. After the house sells, and there is a closing, that compensation will be paid to the listing company. If the same agent who listed the house also found a buyer for that house, then that agent and company would keep the whole commission, and split it between the agent and company according to their employment agreement. Of course, if the same agent is working with both the seller and the buyer, one or both are not getting 100% of the agent’s loyalty.
However, the listing real estate company does not typically keep all of the compensation. In a typical real estate transaction, there are two sides: the listing side, and the buying side. The listing side includes the agent who listed the house and the company that agent works for. The buying side includes the agent who brought a qualified buyer to the table and the company that agent works for. When a house is listed in the MLS, it is seen by hundreds or even thousands of real estate agents who may have a buyer that is seeking just such a house. Therefore, in most cases, the buyer is brought to the transaction by an agent and company different from the agent and company who listed the house.
Therefore, in most real estate transactions, the amount paid by the seller to the listing real estate company ends up being divided into 4 pieces: a share to the agent who listed the house, a share to the listing agent’s company, a share to the agent who represented the buyer, and a share to the buyer agent’s company. (The companies get paid because the broker/owner of the company supervises and has liability for their agent in every transaction, provides back office support to ensure all the details are taken care of, and is ultimately responsible to see that everything goes smoothly.)
Not all 4 real estate professionals are compensated equally. The listing agent and company often keep a larger portion of the compensation than is given to the buyer’s agent and company. And the split between the agent and the company will depend on what agreement that agent has with his broker.
That’s one frequently asked question we don’t have an answer for! We assume it’s because they just don’t know about the existence of dedicated Buyer's Agents.
A dedicated buyer’s agent will provide the following services:
Most traditional companies today act as both Buyer's Agents and Seller's Agents. If an Agency takes listings, it complicates the relationship with the buyer. These companies often end up in situations where they must switch their relationship to one of a Disclosed Dual Agent ("representing" both buyer and seller in the same transaction) if the buyer wants to purchase one of the homes listed by that agent. One of the selling agent’s obligations is to get the highest price and best terms for the seller. Therefore, a real estate company that takes listings simply cannot obtain the highest price for the seller and still get the lowest price and best terms for the buyer. These are competing interests.
It’s similar to a divorce attorney trying to represent both husband and wife and get BOTH of them the most money. Although both legal and ethical in Nebraska, with disclosure and client permission, it’s virtually impossible to represent both in practice. What actually happens is that BOTH sides get less than 100% representation. Remember that an agent has a responsibility to keep the client's information totally confidential, as well as a duty to disclose all material facts. How can one effectively do that with two clients on opposite sides of the table? If you consent to dual agency you are giving up your right to undivided loyalty.
In 1999, the Oklahoma Supreme Court made an interesting statement: "Sellers’ agents and dual agents do not and cannot by law give a buyer the same degree of loyalty as an agent who acts on behalf of the buyer. Sellers’ agents owe their allegiance to the seller. Dual agency invites a conflict of interest. A buyer who relies on the sellers’ agent or on dual agency does not receive the same degree of legal protection as that afforded by an agent acting solely on behalf of the buyer." (Snider v. Oklahoma Real Estate Commission.)
Also, if an agent works for a company that has its own listings, they may be under subtle pressure to promote those “in-house” listings first, and you may find yourself primarily visiting properties listed by that company, even if the agent is doing so subconsciously. Since we do not accept traditional residential listings, we don't have that pressure or potential conflict.
This is a special relationship of trust established by law, similar to the relationship one maintains with an attorney or accountant. When an agent acts in a fiduciary capacity, (as YOUR agent), the agent is legally obligated to maintain a bond of confidentiality, loyalty, obedience, and also to provide their client with full and complete disclosure of any known facts. In a fiduciary relationship, the agent is obligated by law to work in the client’s best interest at all times.
Both a real estate agent and a real estate broker are licensed to sell real estate. Brokers hire agents and are typically the owners and/or managers of a real estate company. Brokers have a higher licensing requirement based on experience and education, and must take a special examination beyond the real estate agent license exam. The state of Nebraska requires every agent to work for a broker who is responsible for training and supervising that agent. An agent may actually have more experience or education than his or her broker, but may have decided to focus strictly on clients, rather than starting a company or managing other agents.
People often use the terms real estate agent and REALTOR® interchangeably, but that is not technically correct. Although both are licensed to sell real estate, the basic difference is that a REALTOR® is a member of the National Association of REALTORS® and must subscribe to the REALTOR® Code of Ethics. We are members not only of the National Association, but also the state and local associations as well. In addition we are members of the National Auctioneers Association which also has a strict code of ethics to which we adhere.