Buying A Home In Cleveland – Why Using A Buyer’s Agent Is Important
Buying a home is an exciting yet complicated process. There is a lot to know about buying real estate and many obstacles that must be overcome on every transaction. This article will focus on buying a home in Cleveland and specifically why using a buyer’s agent is important. While many things discussed here can be applied to buying a home anywhere in the US, every state has different rules and procedures so we may mention some things that are specific to our area only.
THE HOME BUYING PROCESS CAN BE A MAZE OF CONFUSION – YOU DON’T HAVE TO NAVIGATE IT ALONE.
Many home buyers are unaware of what happens “behind the scenes” of a real estate transaction. Even more unclear are the specific roles each real estate agent plays. It is our intention to explain the role of each agent in a transaction, focusing on the duties of a buyer’s agent, and to show why having a buyer’s agent in your corner is in your best interest.
We apologize in advance for this rather lengthy article, but since it can be a very confusing subject, we wanted to be as thorough as possible. We decided to use the popular Q & A format to best address this topic.
Who Represents Whom?
In a real estate transaction, there are two parties, the buyer and seller and there can be either one or two real estate agents involved. Keep in mind that representation can differ from state to state, but here we’ll be focusing on how things are done when buying a home in Cleveland using Ohio law.
The listing agent represents:
1. The Seller – In this case, the agent works solely in the best interest of the seller. This means that they pledge their confidentiality and give expert advice only to them. All that they are bound to do for a buyer is be fair and honest.
2. Both parties – but in a NEUTRAL capacity. This is a very important distinction to understand. If an agent practices “DUAL AGENCY”, a case where a buyer’s agent is not involved, the listing agent can legally represent both parties, but cannot favor one side over the other. Although a listing agent can legally represent both parties, their role becomes more transactional instead of an advocate for either party. They cannot give one party an advantage over the other and neither party can benefit from the experience or advice of the agent.
THE LISTING AGENT CANNOT REPRESENT JUST THE BUYER!
The buyer agent represents:
1. THE BUYER
Who Pays The Real Estate Commission?
The seller pays the real estate commission. In fact, the commission is a pre-determined figure that is set BEFORE the sign even goes up in the yard.
Why would a home buyer choose not to have their own agent?
In many cases, buyers are purely focused on finding the right home. They either aren’t concerned with representation or are not aware of their rights.
Can’t a buyer save money by working directly with the listing agent?
Some buyers think they can get a better deal on a home by working directly with the listing agent. This is more myth than fact. As described above, the seller pays the real estate commission. However, many buyers mistakenly think that the commission will be cut in half should they choose not to have their own agent, thus allowing them to get a better price on the home.
The commission is set up front and does not change based on how many agents are involved in a transaction. There is no statistical evidence supporting a buyer getting a better price on a home by representing themselves. In fact, the opposite may be true because the buyer will end up negotiating directly against the listing agent, who has much more experience in negotiating a real estate transaction.
Then why do listing agents claim they can get me a better deal if I worked with them directly?
A listing agent will make more money if no other agent is involved in the transaction. Therefore, some listing agents will say this so they will not have to split the commission with another agent and can make twice as much money on the transaction.
Also, it is the listing agent’s job to get the highest price for their seller. Therefore, negotiating directly with a buyer will give the listing agent an upper hand during negotiations and will often yield a higher price for a seller. Based on a Realtor’s knowledge, a listing agent will enjoy having an unfair advantage over an unrepresented buyer.
What Exactly Does A Buyer’s Agent Do?
A buyer’s agent represents your best interests at all times. They will also save you time by acting as ”your personal home shopper”. Have you ever been to a COSTCO or a huge department store looking for a very specific item? Isn’t it a lot easier for a sales associate to help you locate it than trying to do it yourself?
The following is a specific list of things that a good buyer’s agent will do:
· Find a suitable property – including assistance in choosing areas, school information, and previewing homes to save you time in your search.
· Explain and educate regarding all aspects of the purchase transaction
· Assist in arranging financing
· Facilitate all inspections
· Promote your best interests at all times and be loyal to you
· Follow your lawful instructions
· Provide you with any information about the seller that may be used to your advantage
· Account for any money handled on your behalf
· Provide you with market and price information regarding recent sales
When do I have to decide if I want a buyer’s agent to represent me?
If you decide you would be better served by having your own agent, you should find one immediately. If you wait until finding a home, it may be too late. If a buyer is on their own looking at a home during an open house or calls a listing agent directly, then the listing agent would have “rights” to that buyer on that specific property and could prevent them from working with their own agent. In this case, the buyer could be denied representation and would be forced to work with the listing agent.
While it is up to a home buyer to decide if they need a buyer’s agent, think about this analogy before deciding against it:
WOULD YOU HIRE AN ATTORNEY IF YOU HAD TO GO TO COURT,
AND THE OTHER PARTY HAD THEIR OWN ATTORNEY?
BETTER YET, WOULD YOU HIRE THE SAME ATTORNEY AS THE OPPOSING PARTY?
Once a buyer is educated about buying a home in Cleveland and why using a buyer’s agent is important, most buyers agree that hiring their own buyer’s agent is a great idea. It will save you time, energy, and possibly a lot of money.
Click below to view other helpful information for home buyers:
About The Authors:
Dan and Amy Schuman reside on the East side of Cleveland. They specialize in luxury homes, working with buyers relocating to Cleveland, and first-time buyers.
For Ohio and Cleveland OH real estate and homes see Cleveland Oh real estate.
For a personal consultation or to speak directly to The Schuman Team, call 216-346-3235.
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Buying A Home In Cleveland – Why Using A Buyer’s Agent Is Important is the property of The Schuman Team and may not be duplicated or used without their written consent. ©March20009
Disclaimer: The Schuman Team practices real estate in Ohio. Since many states have different laws and protocol regarding a real estate transaction, we recommend consulting a qualified local legal professional prior to entering into any written agreement. This blog contains observations and opinions related to our first hand experience working with buyers and sellers in Ohio, but should not be construed as legal advice. Accuracy is not guaranteed.