Q. What is a buyer’s agent?

A buyer’s agent represents a homebuyer in the same manner as the listing agent represents the home seller. Just like the seller contracts with a listing agent to represent them in the sale of their home, the buyer signs a contract with a buyer’s agent that creates a client relationship as opposed to only a customer relationship. In Texas real estate law it used to be that all real estate agents legally represented the home seller. The home seller in most cases pays the real estate commission for all the real estate agents involved, but now the home buyer can make their real estate agent sign an agreement stating that their Realtor will only look out for the best interests of the home buyer. This agreement is called a Buyer’s Representative Agreement.

Q. What’s the difference between being a customer or a client?

As a customer, an agent can only do administrative acts. They can help you fill out contracts and deliver them to the appropriate parties, but they can do no thinking or advising for you. They can write in the price that you tell them but they can’t advise you whether they think that it is too high or too low. As a client, an agent can truly advise you on all aspects of the transaction. They can give you their true opinions and advise you on critical decisions.

Q. As a buyer, do I really need to sign a contract?

Yes. It is now a Texas law that requires a buyer to have a written contract with a buyer’s agent. If not, you are considered a customer and not a client. The Buyer’s Rep agreement is all part of the big effort for agency disclosure. The law wants to make certain that everyone in the transaction knows who is representing whom and in what capacity.

Q. How long is the contract binding for? Can I cancel it at any time?

It can be for as long as you like. Until you trust the agent, you can limit it to one day at a time. If at any time you want to terminate the agreement, all you do is give the agent written notice. If you cancel the contract and then buy a home that that agent had showed you, the agent is still entitled to their commission.

Q. When did buyer agency come into being in Texas?

Until a few years age all real estate agents in Texas represented the seller of a property. Even the agent who was working with the buyer was considered an agent of the seller! Ultimately, homebuyers demanded equal representation with home sellers and real estate brokers responded. Today, homebuyers can choose to have equal representation when buying a home.

Q. Who pays the buyer’s agent?

In almost all cases, the seller pays the buyer’s agent commission. This is how it works. The seller signs a contract with the listing broker that sets the sales commission the seller will pay the listing broker upon the sale of their home. Usually this is 6-7% of the sales price. The listing agent then will enter the home into the MLS to advertise it to all agents who are members. To be a member of the MLS you are required to state what commission you are offering other agents who bring you a buyer for the home you have listed. Usually it will be an even split of whatever the listing agent’s commission is. If the seller is paying the listing agent 7%, then the listing agent agrees to pay half of that, 3.5%, to the buyer’s agent who brings them a buyer. Even though the buyer’s agent is getting their commission from the listing agent, the buyer’s agent is bound by contract to keep the interests of the buyer their sole concern.

Q. If I don’t use a buyer’s agent won’t I save half the commission?

The contract that the seller signs with the listing broker has no provisions for paying less if no other agent is involved. They agreed to pay a set fee when their home sells, period.

Q. Can’t I negotiate the commission down?

Not any more. The real estate commission used to be on the standard contracts and be open to negotiation. But it was determined that it is illegal to try to alter a legally binding contract between two other parties, i.e. the listing contract between seller and listing broker.

Q. The listing agent said there’s no need to get another agent involved. Can I trust them?

By Texas law and agent cannot represent both the buyer and seller. The listing agent’s broker must step in and establish an intermediary situation that is closely controlled by State law. Generally the broker will assign someone other than listing agent from the agency to represent either the buyer or seller. In either case, the actions, conduct, ethics and responsibility to the customer is clearly spelled out in Texas law. Both agents want to represent their customers well and make sure that the customer get the best deal possible, but they also want to make sure that both parties are treated fairly.

The B’s are listing agents and they often work with the Buyer for their listings. However, Texas law provides very specific guidance for Brokers’ representation of both the buyer and seller of the same property.

Q. Who pays the commission if I use a buyer’s agent with a “for sale by owner” home?

Generally, the FSBO has agreed in advance to pay the buyer’s broker a commission. However, if the seller has not made such a commitment, there are several ways to address that situation. You can write it into the contract that the seller pays the commission. You can offer the seller a lower price and then pay the commission yourself. Or you can agree ahead of time with your agent what will happen in that situation. This situation hardly ever arises, but if it does, the B’s only charge a 1.5% fee to the buyer. Say if you found a home by yourself but need someone to take it from contract to close. The B’s would charge 1.5% to the buyer. See the following list of all the tasks to the B’s do.

Q. Can’t I buy a home cheaper if I buy directly from a builder without an agent?

It is important that you understand that the onsite salesman represents the builder, NOT you. The B’s represent you and you alone in the purchase of your new home. The B’s are new home specialist. They may negotiate with dozens of homebuilders every year. The B’s know all the builders and know how to find the hidden bargains from the builders and how to negotiate for more. The B’s will negotiate for you, so that the final contract includes the best possible price, terms and conditions.

Q. Do all first time homebuyer need to have at least 10% to put down?

Often first time homebuyers are afraid that they cannot purchase a home because they don’t have enough money for down payment and closing costs. The B’s can often find creative, innovative ways to make that first time purchase work with little or no money down. The key, however, is good credit. If you don’t know your credit scores, the B’s will have one of our premier mortgage lenders check them for you. Please register below and let’s find out how to get you in a new home.

Q. What can a buyer’s agent do for me?

For a detailed answer to this question go to BUYER SERVICES FROM THE B’S.