Should you use a buyer’s agent or just call the number on the sign and use the seller’s agent? Or if you’re buying a for sale by owner home, should you go it alone? These are questions that every home buyer must confront at some point. Even though it is the largest investment most people will make in their lives, some don’t know they even have a choice. In Pennsylvania, home buyers can choose their own buyer’s agent to represent them. Here are the top reasons to hire a buyer’s agent:
Buyer’s Agents Are Free (or even better than free). The compensation for the buyer’s agent is paid by the seller (or, more technically correct, by the seller’s broker) out of a predetermined amount the seller has allocated for commissions. The seller has agreed to pay a certain amount for commissions no matter whether the buyer has a buyer’s agent or not. Some have argued that a buyer’s agent is actually not “free” because the buyer is the only one bringing money to the closing table and is thus “paying” the buyer’s agent. However, this is not actually correct where the seller has signed a standard listing agreement and will pay the commissions no matter what. But what could be better than free? How about getting paid a commission rebate from your buyer’s agent? Most buyer’s agents cannot do this (they may actually take offense if you ask), but Insight Realty offers a 50% commission rebate that actually pays the buyer, often thousands of dollars, at closing.
Using the Seller’s Agent or Brokerage Could Be a Conflict of Interest. When an agent representing the seller also represents the buyer in a transaction, that’s called being a dual agent. It is perfectly legal in Pennsylvania, but raises some interesting questions. Are you receiving neutral advice? Eight states have actually outlawed dual agency on public policy grounds. You may feel more comfortable having a buyer’s agent with no relationship with the seller’s agent. Even if the brokerage gives you a “designated agent” that agent still may be friends with the listing agent. The best practice may be to obtain a buyer’s agent from a completely different brokerage.
Industry Contacts. Do you need to close your loan in 30 days but your lender is telling you it has to be 45 days? Do you need to hire a great home inspector or handyman? A capable buyer’s agent will know the right lenders and contractors to make the transaction go smoothly.
Insight into the Marketplace. Sure, you can obtain a valuation of the property from a website, but is that number accurate? What specific factors should you consider with this particular home? What properties in the area are most comparable and what did they sell for? How much does this particular listing agent reduce the asking price by on average? What are the marketplace “norms” and conventions? These questions can be answered by your buyer’s agent.
Full access to the MLS. Have you ever received an email alert about a new property only to find out that someone else snapped it up before you could even see it? You may have been using a website that did not have direct access to the MLS. A buyer’s agent can set up an email alert for you to receive instantaneous updates about properties directly from the source MLS.
If you have questions about buying a luxury home in Pennsylvania and getting a commission rebate, visit www.InsightRealtyPittsburgh.com.
David M. Tkacik, Esq. is a real estate broker in the Pittsburgh area and specializes in buyer representation for luxury homes and commission rebates.