Some people hire a buyer's realtor and pay that realtor's fee - which means that realtor really is working for the buyer. There will be a contract involved, and the buyer will pay their realtor's commission on the purchased house.

In most cases, a "buyer's realtor" isn't working for the buyer at all though, they work for the person paying them - the seller. Just be careful what you say as that realtor's fiduciary duty is to the seller, even if they have to be "fair" to both parties.

If you use the "buyer's realtor" as the person who finds you homes within your stated parameters, and as the key master, there is no harm. They will get you into the houses. Just be cautious about how much information you share when it comes time to place an offer. Regardless, unless you are paying the commission, sign nothing.

Your real estate attorney friends can explain all the ins-and-outs to you, what to look out for, and what you need their services for (including reviewing title and survey).

This is the most far fetched advice I have seen on this forum in years! It is totally FALSE!
When you sign a Buyer's Agency Agreement with an agent, he has a legal, fiduciary responsibility to look after your best interests, never the seller.
If you are working with a buyer's agent w/o signing a BAA, then the agent defaults to a sub agent of the seller, which is when you have to be careful with what you say. It is not advisable to do this.
And the seller pays all the commission to the listing firm. Upon closing, it is the responsibility and contractual obligation, for the listing firm to pay the buyer's agent their percentage. The seller does not pay the buyer's agent commission. So the above poster gets it wrong here too.
Instead of asking if you should use a buyer's agent, ask yourself why you would not.

Well, my question is--if we have legal advice and if we can get into the homes on our own, and we are well versed in neighborhood values in our vicinity, know where the new roads will go, and if we hire our own inspector which we would do, what more would a buyer's agent do for us? (I understand the legal agency implications.)

Not sure I understand your question, or in other words: I don't think you need to have a buyer's agent whom you pay an extra fee.
I've bought several properties recently in MD. I used www.redfin.com and signed up with one of their agents. They give a refund on commission. I used the web site to find properties, looked up past sales, etc., and then called my realtor, who then arranged for me to look at the properties. You can easily look up background information about properties, e.g. via the tax records or, in more detail, the MD property records (you have to sign up and then have access to all property transaction, mortgages, deeds, titles, etc.)
For the actual transaction, my realtor recommended an inspector, whom I like. There were a few issues that came up post-inspection, and it was nice to have the agent act as the go-between, especially since he is on excellent terms with a lot of the other agents. The eye-opening experience was that all agents involved weren't as much interested in a sales price as high as possible but rather in a quick sale.

"The eye-opening experience was that all agents involved weren't as much interested in a sales price as high as possible but rather in a quick sale."
Interesting....that is not unknown in the world of law, as well. It suggests that a lowball offer might work out.
I cancelled today's appointment with the young inexperienced realtor, who (after a long conversation) did not want to get me into a local foreclosure property unless I agreed to let her drive me around to look at a list of houses. There was some discussion about "working hard for my clients" and "relationship of trust" all of which I THINK meant she wants an exclusive agreement. So many very pleasant listing realtors have talked to me about wanting to find us houses if their listings don't meet our needs that I don't know what to do, really. My daughter has a friend who is a Redfin agent. Are they different from other agents?

If you go to redfin, they explain how they work. Basically, you get a refund on their commission. Also, I found their web site the most up-to-date in terms of what are still active listings and past sales.
It may depend on what your price range is, but I found that I basically did most of the work rather than rely on a realtor to find me properties.
If you think about it, why wouldn't an agent push for a quick sale, (great finances, little/no contingencies), rather than, let's say, a 20K higher sales price? Their shared commission on the 20K difference would be 600.00, not that much if it means that you have to wait 2 months longer and risk that the deal falls through. That's why most agents aren't crazy about short sales.

Yes, I have been using the state real property website, SDAT, to compare square footage, which many realtors in our area do not put in their listings. I can use that site for sales in the neighborhood although I have another site that will do it easier. I check on the MDlandrec site to see what the seller's financial position might be. There is a court records site to check for judgments and the like. We drive through the neighborhoods of listings before doing anything else since that is the top priority. We will be hiring an inspector who will be beholden to us. So....I just don't know about a buyer's realtor.

Well, you'll need to have an agent involved, if only to get access to the properties, so you may as well have an agent that submits an offer on your behalf and who will share the 6% commission that's officially paid by the seller. See below (there's more info in that article)

"The buyer-agent agreement must show what the RealtorâÂÂs fees are, but the Realtor is paid at settlement from the proceeds of the sale. Technically, the seller pays the RealtorâÂÂs fees, but in reality, that fee is built into the price so the buyer is really paying as part of the home purchase.âÂÂ

Read more: http://www.washingtontimes.com/news/2012/jun/14/cover-story-untangling-the-buyers-agent-process/#ixzz2lOxqvBNe

In other words, if you don't have an agent, the 6% commission is still due, only that the listing agent/agency will get it all.

what ncreguy said.

which underscores the fact that you need to be careful about where you get your information.

A property listed by a Realtor, on an MLS site, includes an offer by the listing broker to share commission with a cooperating or buyer's agent.

The seller will pay the same amount of commission regardless of who sells the house, so you may as well have representation.

Almost none of the 'buyer's agents' who refund commissions ever set foot in the houses they 'sell', & a lot of them teach buyers how to evade the truth ('we haven't *decided* on which buyer's agent is a good fit for us', etc) in order to get other agents to show them houses, give them insights, do research for them, etc, manipulating someone to perform services for which the person never is going to get paid.

The 'buyers agents' will tell the buyer "*You're* doing the work", but of course you're not;
another agent is doing the work, spending the time, making the trips.

This is one reason many agents have begun to have buyers sign a one-time buyer's rep agreement for any houses they show.

ncrealestateguy
This is the most far fetched advice I have seen on this forum in years! It is totally FALSE!
When you sign a Buyer's Agency Agreement with an agent, he has a legal, fiduciary responsibility to look after your best interests, never the seller.

Did you even READ what I wrote!? Obviously not. If you SIGN AND PAY the buyer's realtor works for the buyer.

If you do NOT sign and pay, the "buyer's realtor" works for the seller. No one I know of signs without paying.

If it works differently in NC wonderful. I've only been involved in commercial NC purchases where we signed and paid the broker's commission.

In MD, the "buyer's realtor" --- with a signed contract will customarily get 3%, i.e. half of the customary commission. That means that the agent will submit an offer and negotiate the contract. The contract between buyer and buyer's agent will spell out what the commission is, but it's the commission that is paid by the seller and will be part of the settlement papers (of course, it's factored into the sales price). Now, if the buyer signs an agreement that his/her agent will get 3% of the sales price, but the selling agent demands 3.5%, the buyer may have to pay the .5%.
If you don't sign a buyer's agreement, the agent will not submit an offer, and the sale is handled by the seller's agent. Now, there are some agency that will have another agent in the same office handle the sale for the buyer.

In a way, this buyer's agreement is kind of a disclosure form, which informs the buyer that his/her agent will receive a commission from the seller and spell out what the percentage is. Redfin agents will pass on some of this commission to the buyer..

Here is a link that might be useful: MD law on real estate agents

xamsx, I think perhaps there are difficult rules/laws from state to state. In new york state I used a buyers agent for a real estate purchase. Yes I signed an agreement but did not pay anything. She was paid from the sellers fee.

edited to add. Around here no one who is listed in the mls system is going to let you see the house without an agent. Again each area is different.

This post was edited by debrak2008 on Fri, Nov 22, 13 at 17:11

xamxs wrote, again,
"Did you even READ what I wrote!? Obviously not. If you SIGN AND PAY the buyer's realtor works for the buyer.

If you do NOT sign and pay, the "buyer's realtor" works for the seller. No one I know of signs without paying."

That IS what I read, and you are incorrect, again. If a buyer signs a BAA, they are not charged a fee. The fee is paid to the buyer's agent by the Listing Firm at closing. And it is the only way that an agent legally fiduciarialy represents the buyer. I don't know of any state that requires a buyer to be charged a fee for representation.
Nosoccermom's example is a rare one, and one that most agents do not enforce, including myself.
What state are you in that you got charged for representation?

Huh? I didn't say that a buyer is charged for representation in Maryland. There's no real difference between what nc real describes and Maryland rules/laws.

Maryland does not allow the same agent to represent both a buyer and seller. It allows, however, the same agency to handle sale and buy, but in that case, two different agents from the same agency are required.

Maryland requires the buyer to sign a contract with the buying agent, which states that the agent will receive (normally) 3% of the sales price. These 3% come from the seller's payment of the 6% commission, paid at settlement.

The buyer is not charged a "fee" for representation but rather the BAA discloses that the buyer's agent will receive a fee of so-and-so much as stated in the BAA WHEN the sale closes. If there's no sale, there's no fee or commission.

Said a different way: Seller's agent and buyer's agent split the 6% commission that is paid by the seller at closing. This is explicitly stated in a BAA in Maryland.

Now, if you don't want to sign a BAA, then the agent will not submit an offer or negotiate the sale, and the seller's agent gets the full 6% commission.

I'm assuming that's the same in NC, or can you have a buyer's agent (without or without a BAA) who submits an offer and negotiates the sale but does not receive any kind of commission?

For the OP this means that 6% of commission will be paid by the seller at closing. Only difference whether the seller's brokerage gets it all or whether it has to split with a buyer's agent.

Xamsx if you are going to make a blanket statement about how buyer agency works, then you need to educate yourself on buyer agency. Everything you said is incorrect. And yes I also read what you wrote.

For the record, attorney's use buyers agents too. I have two regular atty clients that buy investment properties. They never call the listing agent.

no you do not need a realtor to buy.. we never use one to buy and it was very much to our advantage. We just signed a contract and in negotiations, seller was willing to take less because her realtor made up the difference by taking less commission since we weren't represented. We have a very good attorney we've used several times.

For us, it is a hassle to use a realtor .. and like you, we know the neighborhoods, etc. prob. more than the avg. realtor. Plus, the home we bought I was able to find before it hit the market by keeping an eye on foreclosure auctions and noticing one of them being updated.. exactly where we wanted to be.

"The seller will pay the same amount of commission regardless of who sells the house, so you may as well have representation."

This is inaccurate.

Let me tell you what I would do if I were looking for a property in MY area.

I am very familiar with my area so I don't need anyone to hold my hand, however, I still would need to get into houses. The Town Hall is my friend. I keep abreast of what is happening in my community, and make frequent calls to the Town. Yeah, I'm a pain....I used to be a realtor, and don't like to pay the RE industry 6% because as an agent you work hard and long hours yet, the top "honchos" get most of the commission...

-I would work with a realtor and on MY OWN. I would sign an agreement PER HOUSE SHOWING, not a full, exclusive BAA (for ALL or ANY house showing or discussion).

Be careful what you are signing. You can always change any wording in "the contract". I'm sure you deal with this being an atty.If you sign a BAA per house, the commission will be paid by the seller to her/him upon the purchase/closing of THAT property only, IF you purchase the property shown by them.

With a PER HOUSE SHOWN AGREEMENT, you still have an option (because you didn't sign an exclusive contract for ALL or any property procured by the realtor) to find a house on your own and not pay a commission.

Example: A friend will tell you that Mr. Smith will be selling his house down the street in the near future.... you can contact him yourself, and do all the negotiating yourself, without the realtor. Your atty friends can help you with the contract, negotiating, and you with your atty will have to babysit the remainder of the process, such as getting YOUR loan on time, getting the property inspected.... Best of both worlds....and if you choose to include your realtor at any point into this scenario because you do not want to deal with the details of the transaction, you still can; either the seller can agree to pay them, or YOU can pay them.

Actually, Xamsax was not wrong. That is a 3rd option. You can hire a Buyer Agent yourself, and YOU would be responsible for the commission for ANY and ALL purchases made with her/him. But why would you volunteer to pay an additional commission? Buyer commissions are built in when the homes are listed with an agency. The only time they are not is if a house is a FSBO....and even then the seller may have listed the property themselves but agree to pay a buyer's agent 2-3%.

True, Schnooks described a situation that applies if the seller can negotiate a reduced commission with his/her agent/agency and is willing to pass that on to you.
However, you may as well use a redfin agent and get their commission refund (about 2K on a 350K sales price.)

Notto

Actually, Xamsax was not wrong. That is a 3rd option. You can hire a Buyer Agent yourself, and YOU would be responsible for the commission for ANY and ALL purchases made with her/him.

YOU COULD do this if you want to, but why would ANYONE DO THIS? The seller is already paying for the buyer to have a BUYERS AGENT! One commission is paid to the listing office. The listing office agrees to Compensate the buyers agent (buyers agency) usually half of that commission.

This is what Xamsax said:

If you do NOT sign and pay, the "buyer's realtor" works for the seller. No one I know of signs without paying.

This is completely false! The buyer does not have to pay for buyer agent representation.

schnooks
"The seller will pay the same amount of commission regardless of who sells the house, so you may as well have representation."

This is inaccurate.

This is absolutely accurate. The only way, the seller MAY pay less is if THE LISTING AGENT agrees to take less of a commission because she is handling both sides of the sale. If the house is listed in the MLS, a buyer cannot buy the house without the seller paying the commission that was contracted to the listing agency.The listing agent MAY consider reducing her commission to facilitate the sale, but it is not automatic. This has NOTHING to do with weather or not the buyer wants representation.

This thread has gotten so far off topic, Germannagirl, the simple answer to your question is this:

Well, my question is--if we have legal advice and if we can get into the homes on our own, and we are well versed in neighborhood values in our vicinity, know where the new roads will go, and if we hire our own inspector which we would do, what more would a buyer's agent do for us?

A good buyers agent can negotiate on your behalf. If you are seeing the homes with the listing agent, it is her/his job to get the seller the best possible price and terms. Who is doing that for you? A good buyers agent can usually get you a better price than you can get for yourself because you are dealing with the person who is trying to get the seller the best price. (the listing agent)

It absolutely doesnt cost you any more to use a buyers agent, so why wouldnt you want to? One agent starts to learn what you are looking for. Watches the market, (many times a day, perhaps more than you do because this is what they are doing all day long as their full time job). They may even contact potential sellers in a given area that may have a house that would work for you.

They can pull the comps for you, easily check neighborhood sales, competition, renegotiate should something come up during the home inspection. (Trust me, attys do not want to negotiate deals, their specialty is the law and the contract, not negotiating for leaky roofs and old heating systems.

Do you NEED a buyers agent? Nope. But why wouldnt you want it? Does anyone NEED a lawyer, not usually. But for the times that there is something more than we may know,its nice to have. If you have purchased one home in 30 years, there is ALOT you dont know about buying a home. Your lawyer can certainly get it to closing legally, but you will most definitely miss out on a few things along the way.

I really appreciate all of this information. So husband and I have decided we DO want to get a buyer's agent, especially as we think we might have found a house we want. If you all could give me some more advice, we have a sheaf of names including those recommended by friends. But yesterday we met a realtor showing us a house that we don't want. We just liked this realtor a lot and thought she was sympatico and smart. She has an SRES accreditation and a staging accreditation and is with a major realty company. She seems to have several years of experience but there is not much else about her to be found on the internet. What would you experienced folks suggest we do? Are there certain credentials she should have?

I'd go with a redfin agent or partner agent and get the refund on the commission. Tell the realtor which houses you are interested in and do your research. If you find something noteworthy, ask the agent to find out on your behalf.
However, in the end, I think it's like a travel agent or college consultant: Nobody will be as interested and motivated and willing to spend as much time on your house buy as you yourself. I was able to discover things about the properties I was interested in that the realtor had no clue about simply by using publicly available information (like details about foreclosure owners, lifetime tenants, lack of disclosure of defects by seller and listing agent, etc.)

Yes, I have checked local court records. The seller of the house we are interested in was almost foreclosed upon last April. She hasn't put a penny into the house during the last 5 years she owned. She doesn't even pay to heat the place when buyers are visiting! (Why we are hiring our own inspector). There are a couple of small liens on the house. Fortunately she put a lot down on the house when she bought at the height of the bubble, so the mortgage is not that big and the liens will be paid off. The neighborhood is middle class and stable, I think I could make this fixer upper beautiful.

Germangirl .. if you have a house you are really interested in, I still don't see why you would need to hire a realtor.. you can do the negotiating on your own.. if you are comft w that.. we negotiate just fine on our own.

Another advantage of not having a realtor is the seller's realtor may see an advantage in her/his seller accepting your offer because said realtor has potential of getting a hefty commission by not having to split it w/ another agent.

and..
Linda

"The seller will pay the same amount of commission regardless of who sells the house, so you may as well have representation."

Our seller did not pay the same amt of commission she would have if we had been represented by an agent. She would have paid the 5% instead of the 2.5% her realtor agreed to come down to since we were NOT represented by anyone. Seller wanted $290K, we wouldn't go that high so seller's realtor agreed w/ my husband to reduce her commission by only taking half of 5% to make up the difference.

And we would never expect an attorney to negotiate for us. We are quite capable of doing that ourselves.

Actually, if you go to Redfin, you can also look for foreclosed properties that aren't on the market yet. There are MD properties that were foreclosed 2-3 years ago and still aren't for sale. However, you can also see the amount for which the bank foreclosed them.

nosoccermom, what good does that info do for someone who wants to buy? If they aren't for sale, they aren't for sale.
Germanna Girl, IMO, the best credential behind an agent's name is PNP.
This credential is the trade's number one respected and most important credential in regards to what matters most to a client. It will ensure that the agent will have your back throughout the transaction.
Good luck no matter which way you go.

Schnooks as I said in the paragraph of my post.

The only way, the seller MAY pay less is if THE LISTING AGENT agrees to take less of a commission because she is handling both sides of the sale. If the house is listed in the MLS, a buyer cannot buy the house without the seller paying the commission that was contracted to the listing agency.The listing agent MAY consider reducing her commission to facilitate the sale, but it is not automatic. This has NOTHING to do with weather or not the buyer wants representation.

Schnooks as I said in the paragraph of my post.

The only way, the seller MAY pay less is if THE LISTING AGENT agrees to take less of a commission because she is handling both sides of the sale. If the house is listed in the MLS, a buyer cannot buy the house without the seller paying the commission that was contracted to the listing agency.The listing agent MAY consider reducing her commission to facilitate the sale, but it is not automatic. This has NOTHING to do with weather or not the buyer wants representation.

The only way, the seller MAY pay less is if THE LISTING AGENT agrees to take less of a commission because she is handling both sides of the sale. If the house is listed in the MLS, a buyer cannot buy the house without the seller paying the commission that was contracted to the listing agency.The listing agent MAY consider reducing her commission to facilitate the sale, but it is not automatic. This has NOTHING to do with weather or not the buyer wants representation.
We don't know the terms of the agreement the seller has with the listing agent. No one has implied reduced commission is automatic, but we also don't know if it is already agreed. It may have EVERYTHING to do with whether the buyer wants representation. A smart buyer will consider how much such representation is costing them. If a buyer doesn't need or want representation, why would the buyer risk paying for something they don't need?

Regarding when an agent represents a buyer's interest you really need to check out the laws of your state. For instance, in Oregon you don't need to pay an extra fee or sign a contract for an agent to work solely for you as the buyer.

Here is a link that might be useful: Oregon agency disclosure pamphlet

Yes, Terriks, I agree, I know some of the remarks made are not correct for my state.
I also know I've never signed a buyer agreement and been represented by a buyer agent.
In the end sometimes a buyer agent is good, other times one is not needed and can hinder the transaction.
There is no one size fits all.

'The listing agent MAY consider reducing her commission to facilitate the sale, but it is not automatic. This has NOTHING to do with weather or not the buyer wants representation.'

bingo.

I'd take with a grain of salt any claim that a listing brokerage would reduce its commission by half just because a buyer 'didn't want representation'.

If it were a last-ditch effort to sell a property when the sellers were maybe about to lose it to foreclosure or when they were buying their next house as soon as the current one closed, it's a little different.

"I'd take with a grain of salt any claim that a listing brokerage would reduce its commission by half just because a buyer 'didn't want representation'.

If it were a last-ditch effort to sell a property when the sellers were maybe about to lose it to foreclosure or when they were buying their next house as soon as the current one closed, it's a little different."

We .. buyers.. did not have or "want" representation. The house we just purchased had not even hit the market yet.. we are buyers who are month to month renters, no contingencies, large escrow .. basically your seller's dream. It is the holiday season and the market has slowed and interest rates continue to be iffy. Seller jumped on our offer and agent agreed to reduce her 5% commission to make up for our under asking price offer. And on top of that.. seller is letting us choose paint, granite, tile, etc. It's a win win.

Schnooks are you talking about new construction? If the house wasn't on the market yet, why was there an agent contracted to 5% commission in the first place??

That was my next question too.

@ncrealestate:
'cause the OP said: "The seller of the house we are interested in was almost foreclosed upon last April." Seeing which houses have actually foreclosed and for how much may be useful to know, either to figure out whether/when the house may show up on the market.

I'll tell u the whole story.. we have had a hard time finding what we want in our walk to town geog. area we wanted. I have actually looked at streets we really like, gone on Zillow and noticed some nice homes that had been listed, but never sold. Left 3 or 4 notes in mailboxes and got 3 responses.. two of which we seriously considered, but weren't fits. In our anxiousness to find a house, I also started checking out foreclosures. I noticed a solid brick cape cod was about to be sheriff auctioned. I asked neighbors about it and was told that hoarders lived there. So I didn't feel comft. pursuing it. I watched as the buyer cleared out the house and finally I stopped to ask a worker if the house was going on the market. He said yes.. so he gave my number to the owner. A nice sharp mom of 3 young kids met me to show me the house. I'm like, how in the world did you get into flipping houses? Her husband is very successful and she does this on the side. She met an REO realtor who sold her her foreclosed mcmansion. She and this realtor work as a team in these investments. So owner does not make any sales w/o her realtor partner who finds her these good buys. So there you have it. And yes, we are smart enough to question flippers/quality/skimping, etc. She has allowed me to choose granite, tile, paint, lighting fixtures.. it's been great. I can go to the house whenever I like. She's given me assurances of their dedication to following codes, etc. We feel very good about it. I had even peeked inside while the company they hired was cleaning out the "hoard" .. it was not at all like the show thank goodness! Just a LOT of stuff. I even asked the workers about the condition of the house.. they told me has great bones and no mold/water issues.

It sounds like she is relieved that we swooped in before her having to wait for the work to be done to list it as they have another house in a high end community that they need the $$ put toward. Plus, things have slowed down, interest rates are up a little... etc.