Special offer

Buyer Representation ~ Addressing Buyer Concerns

By
Real Estate Agent with Westcott Group Real Estate Company

In the previous post in this series, "Long Island Homebuyers ~ Buyer Representation," it was discussed that buyer clients have access to information that could give them leverage in contract negotiations.  So far in this series, it has been discussed (in detail), why it is better for buyers to have their own representation.  However, despite all of the advantages that buyer clients have over buyer customers, there are still some common concerns that many Long Island homebuyers share about being contractually obligated to a buyer's agent. 

 

Long Island homebuyers are accustomed to having the freedom to work with as many agents as they would like to.  Buyers that are comfortable working with a single agent, without having a buyer broker agreement, are missing out on the advantages of having buyer representation.  This may be a case of not knowing about their options, or it may be a choice to not be contractually obligated to one particular agent.

 

The following is a look at some of the most common concerns that Long Island homebuyers have about buyer representation.

THE CONTRACT - Homebuyers sometimes feel that they have limited flexibility if they are under contract with one agent, asking questions like..."What if things don't work out?  How long will I be "stuck" with this agent?"  With proper due diligence, this shouldn't be an issue.

 

First of all, the contract length is negotiable, as are the contract terms.  Often times, there will be a termination clause added to the contract to allow either party the right to cancel the contract.  Since this is decided between an agent and a client, there is no "rule of thumb" that can be elaborated upon in this post.

 

If you are a homebuyer, and you want to make sure that you and the buyer's agent are a good fit, you should interview them the same way that you would if you were listing your home with an agent.  During the interview, any concerns about the contract should be addressed.

 

 

COMPETING CLIENTS - When homebuyers choose to have buyer representation, they want to make sure that their interests are protected, and rightfully so.  So what happens when a buyer client is interested in the same home that another client of the buyer agent is also interested in?  Very simply, both clients should receive the same level of service, which includes the following:

 

 

 

  • Confidentiality - The buyer agent owes all buyer clients confidentiality.  Neither client will be told what the other client is offering, should both clients be bidding on the same home.

 

  • Disclosure - The buyer agent should provide all of the same information to each client in a timely manner.  While the information won't be provided in the same e-mail or phone call, it should be done at around the same time to ensure fairness to both parties.

 

Neither client should expect to receive preferential treatment by the buyer agent.  In fact, the process should be handled in the same manner that a listing agent would use if a particular buyer was interested in more than one of the agent's listings.

 

 

DUAL AGENCY - The situation may arise where a buyer client is interested in making an offer on one of the listings in the buyer agent's office.  Since all listings are technically with the brokerage, and not with the agent, this would create a dual agency situation.  As long as this is disclosed to both the buyer and the seller, it is perfectly legal in New York State for this to occur. 

 

The listing agent cannot be the buyer agent in the same transaction.  Should buyer clients be interested in one of their buyer agent's listings, the broker would have to designate another agent to represent one of the parties.  This is because it would be impossible for one agent to provide the same level of service to both the buyer and the seller.

 

It is best to discuss this situation upon signing a buyer representation agreement to see how the situation will be worked out.  In my opinion, the fairest way to handle this type of scenario is to have the agent continue to represent the client that has been with him the longest, regardless of whether it is the buyer or the seller.  The broker would be responsible for designating another agent with comparable skills to represent either the buyer or the seller. 

 

It is important to note that all confidential information that was learned about the client by the buyer / listing agent is to remain confidential, and cannot be used during the negotiation process.

 

This situation occurs far less than most people would expect.  While it is a legitimate concern, it is one that can be overcome as long as all of the proper disclosures are made.

 

 

There is one more concern that most Long Island Homebuyers have about buyer representation - COMPENSATION.  The issue of how buyer agents are compensated will be addressed in the next part of this series.

 

 

About The Author

Adam Waldman is a Long Island Residential Real Estate Professional that can assist you with the purchase and/or sale of real estate on Long Island, from bank owned homes to new construction to waterfront property, and everything in between. Adam is a Relocation Specialist that has created a network of real estate professionals throughout the country in an effort to assist relocating Long Islanders in their transition to new areas. These professionals are experts in the field of relocation and can serve many purposes beyond a simple home search. In addition to being a Relocation Specialist, Adam also holds the designations of Certified Buyer Representative (CBR), Senior Residential Specialist (SRES) and e-PRO.

Please visit www.TheLIReloGuy.com for your relocation needs and www.AdamWaldman.com for your local needs.

Adam Waldman - RE/MAX Best - 631-357-2036 - adam@AdamWaldman.com

Comments (9)

Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Adam, another concern that makes buyers squeamish or reluctant to do a buyer rep agreement with a Realtor is "commitment." They may not want to get locked into one Realtor if they don't work out for them. The Realtor can offer an "Easy Out" clause or have a shorter term like two months.

Jun 24, 2008 07:07 AM
Jeremy Blanton
Myrtle Beach Homes Blog - Myrtle Beach, SC
Myrtle Beach REALTOR®- myrtlebeachhomesblog.com

Isn't that the #1 concern Adam?  How much does it cost me to have you represent me?

Jun 24, 2008 07:20 AM
Tom Plant
WINEormous.com - Murrieta, CA

Adam - Please forgive my lengthy absence from your blog. Life has been happening! As always, a very thorough and highly profession post filled with very useful information on buyer representation. Kudos, my friend. 

Jun 24, 2008 08:39 AM
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

Wonderful information, Adam, and it's critical for buyers to understand that having their own representation is priceless.  Who wouldn't want a professional looking out for their best interests?

Jun 24, 2008 03:45 PM
Pam Pugmire
Silvercreek Realty Group - Meridian, ID
Meridian Idaho Real Estate

Great information Adam.  Many people don't understand client representation, and therefore put themselves at a disadvantage in the homebuying process.  My parents bought a home as a customer before I became licensed.  A year or so after the transaction when I became licensed, they told me that they wished they had their own representation in the deal.  Homebuyers need to remember that the care we give to our clients continues well after the transaction! 

I look forward to your next installment! 

I will be going to NJ on thursday~make the weather good for me ok?

Jun 24, 2008 05:07 PM
Jesse Clifton
Jesse Clifton & Associates - Fairbanks, AK

I like this series Adam... Buyers not using the services of a buyers rep are missing out.  There's potentially a lot of information they'll never see or hear that could make a world of difference in their decision making process... and most of the time that representation doesn't them a penny.

Jun 24, 2008 06:28 PM
Adam Waldman
Westcott Group Real Estate Company - Hauppauge, NY
Realtor - Long Island

GARY:  I agree.  As a buyer's agent. I would prefer to let them out rather than to feel stuck in a relationship.  Thanks for commenting, Gary.

JEREMY:  Yes, that is the number one concern.  I will be putting out a post later on that discusses that issue.  It was too long to include in this one.  Thanks for commenting, Jeremy.

TOM:  Great to hear from you.  No apologies necessary.  I'm glad that things are busy for you.  Thank you for your support, Tom.  I'll speak to you soon.

LISA:  I've noticed that more and more people are receptive to the idea.  It's just that they haven't been exposed to it much on Long Island.  This series of posts has gone a long way to helping to explain the benefits, and they can read it at their own pace, rather than having to digest it all in a formal presentation.  Thanks for commenting, Lisa.

PAM:  I hope that your trip to NJ was good.  Sorry that I didn't respond to this sooner.  Anyway, I really appreciate you sharing the story about your parents.  It goes to show that people may be interested in this option if it is given to them.  Thanks for commenting, Pam.

JESSE:  I couldn't have said it better myself.  They are the ones that are actually paying for it anyway, it's just that they often times don't get the benefit of their payment.  Thanks for the support, Jesse.  I really appreciate it.

 

Jun 29, 2008 01:29 AM
Christina Cavins
Irongate Inc. REALTORS - Centerville, OH
www.BuySellOH.com Search Ohio Homes For Sale

Great post! Please contribute to my dual agency blog article at http://activerain.com/blogsview/579085/The-True-Test-of

Thanks,

Christina

Jul 04, 2008 05:14 PM
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Going into your specific buyer representation models is very helpful. Thank you for your posts!

Nov 10, 2008 12:50 AM