Buyer Representation ~ Finding the Right Home for the Right Price

So far in this ongoing series - Long Island Homebuyers ~ Buyer Representation  - it has been discussed that there is a difference between being a client and a customer, that there are distinct disadvantages to dealing directly with listing agents, and that homebuyers that have their own representation have more homes to choose from than those that are unrepresented.  These are all very important aspects of buyer representation, but the most significant advantage of working with a buyer's agent has yet to be discussed. 

So, how can having buyer representation help you find the right home for the right price?  The answer is - by receiving professional guidance.  As a buyer client you are entitled to counsel from your buyer agent, whereas buyer customers cannot receive this level of service.  This is because agents working with buyer customers have a fiduciary responsibility to the sellers that they represent.

Many people have heard the term Comparative Market Analysis (also known as a CMA), but not usually in relation to homebuyers.  This tool is customarily provided to homeowners during a listing appointment to help determine the listing price of a home.  As a buyer client, you are entitled to have a full CMA done for you on any homes that you are interested in buying, which can be very helpful in determining an offer price.  Buyer customers, however, cannot legally be given a full CMA because they are not entitled to receive counsel from a seller's agent. 

Buyer customers may ask for comparable home sales, however, they will not receive the full market analysis - just the factual information.  Because seller's agents are obligated to obtain the highest possible price for the sellers that they represent, they must provide customers with the highest comparable home sales available.  As a buyer client, on the other hand, you have your own representation, and your agent must look out for your best interests, which means searching for the lowest comparable home sales to justify your offer price. 

The other advantage to being a buyer client is that your agent can help you to decide which homes come closest to meeting your wants and needs.  Although a home is a place to live, most homebuyers today are also interested in the potential resale value down the road.  A seller's agent, working with a customer, cannot discuss the advantages and disadvantages of each potential home, because it would force them to work against one (or more) of the people that they actually represent.

Let's say that you are a homebuyer that has looked at a number of homes, and you are trying to decide between three of them.  For the purpose of this example, let's say that each of the homes were similarly priced, and each was taxed at approximately the same rate.  At this point, buyer customers are basically on their own in determining which home to choose, whereas buyer clients can receive guidance from their agent to help in the decision-making process.

There are a number of factors that go into making a decision between homes beyond the CMA.  Since each situation is unique, it is not possible to give a list of home characteristics that are either positive or negative in this post.  However, a buyer's agent can provide this guidance on case-by-case basis. 

SUMMARY:

If you are a homebuyer that is interested in receiving a detailed comparative market analysis to help determine offer prices on homes, you should consider having your own representation.  If you are a homebuyer that is looking for assistance in deciding which homes best fit your needs, you should also consider having your own representation.  

The decision to buy a home is one of the most important decisions that most people make in their lifetime.  It makes sense to take advantage of all available resources to help make the right decision...doesn't it?

The comparative market analysis is a practical tool to guide purchase offers, as is the counsel of a buyer's agent.  In the next part of this series, you'll learn how information gathered for buyer clients can be a very powerful tool to help purchase a home for the lowest possible price.