Should I Sign a Buyers Representation Agreement?

You’re a buyer just getting started with your home search.

You decided NOT to sign a buyer’s representation agreement and go at it alone.

Here are five reasons why this choice might prove costly.

1. You’re not seeing the full market

When you search on your own, you are missing out on off-market listings, private exclusives and early previews of listings. 

a man about to sign some documents from a female real estate agent

Right now, there are over 175 private exclusives not listed to the public and dozens of high-end homes being discreetly offered off market. As a solo buyer, you simply don’t see the entire market. This is meaningful in inventory-starved segments of the market. 

Every week, I speak with my Compass colleagues who “will be listing” a property soon. Many times, the truly wired-in buyers working with great buyers agents will get in to see a property a week or two before you see it on StreetEasy. 

2. You’re wasting your valuable time

You will spend considerable time getting up to speed on the market and inventory. A seasoned broker, on the other hand, knows the buildings, the layouts, and the exposures and will be able to cut through the noise based on your specific needs and desires.

Let’s say there are 65 listings in your price point across several neighborhoods. A great buyer’s agent will hand-pick the best 8 to 10 for you and get you in to see them before they’re gone. Part of a buyer’s agent’s job is to be 8 steps ahead of you when searching for that perfect apartment. 

3. The seller’s agent does not work for you

If you decide to go it alone, you will be working directly with the seller’s agent, who has a much different agenda than you do. 

A listing agent has a fiduciary duty to the Seller to get them the highest price. 

Sure, the listing agent will do whatever they can to make a deal happen with you, but it would be unusual for them to say anything negative about the listing they are representing. 

a male client together with seller's real estate agent

The listing agent has an obligation to represent the seller’s best interest, not yours. This is true regardless of how nice they are. This is not something that should be discounted. 

And remember while the listing agent has an obligation to be honest with you, they won’t go out of their way to disclose all of the facts that will help you negotiate the largest possible discount. 

Having a seasoned buyer’s agent on your side will help ensure you are not buying something with thorns.

Think about it like this: My team has negotiated hundreds of sales terms. If you believe there is value in the experience, then you should work with a buyers agent. 

4. Are you really getting the best deal?

Figuring out what real estate is worth is never easy. Even though I’ve been doing this for two decades, it is still more art than science. 

You may believe that StreetEasy or Zillow has all the information that you need but a good broker will know more. There are often details behind the sales comparables that led to the sale closing at a specific price. Was the seller distressed, did one of the bedrooms face a development site, was it a divorce or estate sale, is the building known for being difficult with Board approvals, did the neighbor buy the apartment next door for 10% less off-market? You get the idea. 

A great buyers agent will have access information that effects the value of the comparables and the listing, that most buyers wouldn’t know.

5. Resale Potential 

Finally and most importantly, a great real estate agent representing you on the buyer’s side should also have deep knowledge of the resale market. 

Buyers rarely dig that deep into what the resale market will be like 5 to 10 years down the road for the unit they are considering. You should understand that just because you love an apartment does not mean it will be an easy sell down the road. 

A great buyer’s agent can seen issues now that will lead to a headache down the road when you go to resell.  

Exorbitant monthlies, for example, will continue to trend higher and have a negative impact on the value of your property. Issues with floorplans that buyers tend to shy away from (think small secondary bedrooms where fitting a queen bed is impossible). 

And so before you decide to jump into your home search without a life vest, you should seek a referral from a trusted friend or colleague for a great buyers agent. 

This is Todd VItolo from the Columbia Vitolo Team at Compass

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