There are many good reasons to use an exclusive buyer agent. Exclusive buyer agents only represent buyers. Their fiduciary duty lies only with their buyer clients. The article below gives one very good example. The first scenario described below makes an important point of what can happen if a buyer decides to work with the listing agent. If you are considering buying a home in Canton MA or a surrounding community, contact your Canton MA Buyer Broker to find out how I can help you buy a home in Canton MA.
Take this one to the bank...literally. The best example I have personally seen in using a buyers agent to buy a home.
(Names have been changed to protect the naive)
Scenario A: Jon and Judy Friend go to look at houses. They don't have a buyer's agent because they don't want to feel pressured into buying a house. They just want to look on their own and when the time is right, they will buy it from the agent listing the house. They find a cute little bungalow for $240,000 at an open house and love it so much they want to put an offer down. The listing agent sitting the open house asks if they have been pre-approved for a home loan. They say no, so the listing agent sets them up with a lender that gets them pre-approved for $280,000. The house has been on the market for 4 months though and will need a little work so Jon and Judy want to put in an offer for $215,000. The listing agent mentions that the seller is already about as low as they can go, but Jon and Judy stick to their guns even though they love the house and proceed with their offer of $215,000.
The listing agent then takes the offer to the seller with the added knowledge that Jon and Judy love the house and can actually afford well over the asking price. He recommends to the seller to put in a little of the work needed and come back with a higher offer. The sellers counters at $235,000. The listing agent then presents this counter offer to Jon and Judy stating the seller will fix some of the issues but can't go any lower. Jon and Judy do not know this for sure and don't know if the seller is entertaining any other offers. They concede and agree to $235,000.
Scenario B: Now flip this scenario as if Jon and Judy had their own buyer's agent before stepping foot into a home. They can still tour homes by themselves if they wish but the pressure from the listing agent is now off of them. Their buyers agent has already encouraged them to get pre-approved before looking at homes so they are not disappointed in finding a home they cannot afford. They stumble upon the same home for $240,000. They ask questions but don't seem that interested (at least to the listing agent). They then proceed to talk to their buyers agent about the home and how much they love it! They would pay the $240,000 if they had to but since it has been on the market a long time they want to offer $215,000. The buyer's agent presents this offer to the listing agent with a letter of pre-approval for the EXACT amount they are offering. Not a penny more. Now the listing agent doesn't know if Jon and Judy can even afford anymore.
The buyer's agent also doesn't mention anything about how much the Friend's love the home but states they have seen a lot of homes recently and this one appeals to them. The buyer's agent gives no indication that Jon and Judy are in love with the home. The listing agent then presents the offer to the seller with this information. The seller now does not know whether or not the buyers can afford any more or if they love the house enough to come up on their offer. The seller is motivated and doesn't want to loose the deal so the seller agrees to counter offer at $220,000. This counter offer is presented to the buyer and they accept.
Because Jon and Judy used a buyer's agent, they have just saved $15,000! Now this is just one example of how a buyer's agent can help out buyers. There are loads of reasons and examples where having the buyer's agent handle all the details can really make sense. There is nothing unethical or illegal about this, it is simply a matter of leverage. Who's holding all the cards and when to show them can really be a skill in the negotiating process.
Something to keep in mind if you are a buyer's agent. Thanks for reading. These other posts might be of interest to you as well.
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