Buying real estate is like swimming in the ocean. Before you start you aren’t sure how deep the water is, you don’t know if there are sharks waiting for you, and you aren’t sure if you can swim out and back. It’s a nerve wracking, stressful, and potentially frightening experience. On the other hand, a relaxing swim in beautiful waters where you are confident of your capabilities can be one of life’s great pleasures.
In order to increase the chances of a pleasurable experience you should choose someone who knows the local waters, is aware of the predatory creatures that might be lurking, and can help you get comfortable with the challenge and talk you through the tough spots. That pretty much describes a good buyer’s agent.
Their job is to
- Help you find great property and explain the pros and cons.
- Help you with negotiating, advising, and communicating to avoid problems and solve ones that arise.
- Coach you through the transaction process.
The way real estate transactions are structured in California, the seller pays the commission for the real estate sale. The total commission is split between the listing agent (the one representing the seller) and the selling agent (representing the buyer). In most cases, your best choice it to work with a buyer’s agent who is trying hard to find you the best value and is looking out exclusively for your best interests. If you work with a listing agent directly instead, the seller still ends up paying half of the commission to the person representing the buyer and half to the person representing the seller. In this case, it’s both halves to the same person. Instead, you might as well make sure the person getting that money has been busting their butt on your behalf.
There are complex agency relationships that require a buyer’s agent to watch out for the fiduciary interests of the seller. It’s written into the Agency Disclosure documents we discuss in another post.